5/22 – Cameco (uranium mining) hit a 52W high so I’m watching it to dump. Gain will be about 30% or so. I’m at about $375k on the taxable account and thinking about doing some other selling this week.
Everything is in buckets. The TFSA I don’t even know what to do with. The RRSP was originally intended to wait until I turned 65 or so to draw down but I’m not sure about that as a good tax minimization strategy. I worry that something will happen to me and all of it will collapse in that year, creating beaucoup tax impact, leaving so much less for the kids. So I might draw $5k a year (or the TFSA limits for the year) from the RRSP to fund the TFSA. The LIRA will be tapped into once I turn 52 or so and should be all spent by the time I’m 65.
Only 2 days off so far and I feel so overwhelmed with choice for what I could do every day. Work is easy compared to this.
5/13 – Calculated savings rate on NI from Jan-April 2013 at 85.1%. It’s come a long way from the days when I could only manage to save one paycheque/month and spend the other. That’s just over 6% higher than last year but I included dividends this year and didn’t last year. Should drop to about 55% for the year once I quit working. If I kept that up, I could save ~ $50k/year working only 4 months out of the year. Tempting. Golden handcuffs. It’s a dilemma.
My son is giving me 50% of his paycheques to invest in his RRSP. Now I have to bet on whether I think Keystone will be approved in November… People get too fussed on savings rates and deprivation. 25% is good enough for most people and their goals. Too bad neither of us are very patient that way. I’m learning to slow down anyway.
5/1 – total spend
$2,734.37. $2,778.65. Note to self – wait until everything gets processed. $200+ over budget (birthday gift and travel). It’s ok since I’m going back to work for a week in June to cover as manager during the busy time – rule #1 is “burn no bridges”. Rule #2 is make them love you. Yay, gives another $4k for some fat to feed that muffin top and some extra traveling money this summer. I think they think that I’m coming back after the summer off. Must disabuse them of this notion…
4/24 – miners up 5.5-7.5% today – whew!
4/17 – bought $5k of Crescent Point today, yield of ~7.8%. Divvies at $2,533 on the monthlies. Thisclose to $40k/year income. Wow, that was quick.
4/16 – bought $7k today – Mandalay, Goldcorp, a bit more of Barrick and Vale. Dividends at $2500/month even steven – and I didn’t even plan it to be an even number. Annual/semiannual up to $752. That’s not allocated anywhere which is fine since it’s so little. Average dividend yield of all buys 3-4% but some of it was with buying stock with dividends. Now I need a better plan for when I don’t have regular money coming in – like cash reserves.
New blog on the reader – this guy is fascinating: http://www.joshuakennon.com/
4/15 – Mark Cuban was right – I should invest in stocking up on toilet paper because I think I just crapped my pants at the market drop. Time to tap the LOC again… sigh…
4/10 – and down over 1% – boo paper losses.
4/9 – up 3.48% today. Yay paper gains. 28 days of work left. I’m starting to annoy people at work with my count-down. When I’m bored, I get mischievous. Got my tax refund today. A friend asked me if I was going to Hawaii with it but I told her I already spent it last week – on a trip with Baytex. She said “that’s no fun” and I said “oh yes, it is.” They just bought a $750k house and a Merc. I bought time.
4/7 – Book I’m reading this weekend: It’s when you sell that counts – pretty decent read. Checklists and everything.
4/5 – Bought another $10k of Baytex at $40.38 on Thursday after it took a tumble. Budget up to $2,487/month now. I’ve kicked myself over and over for not dumping some stuff in mid-March. ACKKKK!! My selling gut instinct is somewhat ok. Now just to listen to it. Well, and that the value averaging method told me to sell a bit. Next time I won’t ignore it.
3/30 – closed out at a gain of 5.4% this month. Yay. Except when I consider that it was 9.9% 2 weeks ago. Really should have bailed out of one of those interminable work meetings for 5 minutes to dump FTP.
Went over-budget for the month – budget $2,432 and spending $
2,509 (but haven’t bought bus pass for April @ $195). Came in at $2700.96 after everything cleared. I blame Costco and the boys for liking M&M Meats lasagna and my being too lazy after coming home to want to cook from scratch. Fortunately want to eat down the freezer and pantry prior to leaving for the summer, so there’s some easy savings.
Have a quasi-understanding (depends on if they can get someone in for me to train) that my last day will be 2nd week of May. Gives me lots of time to get some work done on the house, get the moho all prepped and take a shake-down trip before taking off for the summer. And back to writing the novel.
Good book I’m reading: What I learned losing a million dollars
3/29 – Stop loss strategy for dividend growth stocks – Jeff Paul (great SA writer)
3/20 – this budget makes my spending look fat. It’s threatening to have a muffin top too closely every month (I’ll probably be ~$250 over this month). And I know for a fact that I tend to spend more when I’m not working than when I’m working. On the bright side, I calculated that I have about $112k in non or low paying (0-2% dividend) stocks that I could sell to buy some dividend payers. So say I get an average of 5%/year out of those or ~$6k/year. Now that’s more like it. Or I could start hitting the sell button more quickly on those gainers. I do like trading for the hell of it once in awhile. Straight dividends is kind of boring. I don’t feel comfortable drawing more than dividends though – what if there was a downturn and I had losses? Do I stop drawing? I guess. Although I’d probably just freak out and go back to work. No shame in that. Not like I have a reputation to uphold or something unless it’s a reputation to do whatever I’ve got to do to make things work.
Fricking Fortress took a little tumble. Knew I should have dumped that mofo. Damn work costing me money again.
3/15 – up 9.9% or $35k in March. Only $21k for the year which is sort of close (or within 2%) of my expected annual draw this year (previous losses entirely due to Poseidon tanking). I bought my son a bottle of peanut butter vodka, a good Malbec for me and we’re heading off to Five Guys to celebrate (for the little guy). I can’t focus on work on these crazy $10k gain days… is this a sign of a gambling addiction? Oh noes, an emotional investor (who actually enjoys making money for sitting on her ass doing nothing.) At least I didn’t buy a purse this time – I like the one I bought last year too much to want to trade it out with my other ones. I get emotionally attached to my purses.
Going to spend the weekend doing research and maybe setting some sell orders. The value averaging method I follow tells me it’s time to do some selling. Fortress Paper is up 39.23% (RRSP A/C) and 23.78% (taxable A/C) – the reason for the big move is that the company announced a division sale, so those might be on the chopping block. Value investing for the win! Only problem is nothing else is even close to where I think it should be, but then maybe I’m delusional.
3/11 – up 7.3% this month and getting nervous. Again. I’m up almost 30% on one of the tranches of the Fortress Paper stock I bought a few weeks ago (on sale!) and over 15% on the other. And overall with the drop in WTI differential, the heavy oils are doing better. Yay – that means no dividend cuts (I hope). I’ve tuned out the last few weeks but will start paying attention again to some of the technical signals. Gasfrac dropped back to where it was so there goes that 65% I could have made. Rats, I could have played with it again.
3/9 – Chris Damas writes a great newsletter over at bcmiresearch.com – I can’t link to his latest on ATP, I think you have to sign up for his newsletter. He recommended the Dundee REIT (div at 6.2%) this week. I bought Cameco on his recommendation (and with my own DD) earlier this year and have had good returns on that one (up over 20% anyway). I’ll do some research on Dundee and maybe add it to the portfolio when I get paid in a couple of weeks. I wanted a couple of REIT’s in the mix anyway.
3/8 - up
5.5% 5.9% so far in March – heheh makes up for the 4.8% down in Feb. – damn you Poseidon! I nearly peed myself upon hearing the rumors (probably totally unfounded) of a PWT takeover. I used to work with one of the head honchos there but I don’t think he’d tell me anything, plus it’s not ethical to ask.
3/2 – dividend income of $2,416 in Feb and expenses of $2,402. Oh no, I could have bought another book! March will be a no book buying month though – have to get through the ones I’ve got.
ATP cut their dividend by about 2/3 – good thing I didn’t have much of it. I was wrong on that one – thinking that they wouldn’t cut. Oh well.
2/25 – Total income at $38,267/annum – bought dividends with dividends. Like a freaking woodpecker, I tell you. RPL this time. I’m trying to stay away from the noise of all the blogs and talking heads saying “buy this! sell this!” and all that crap. I never ever listened to all that in the years where I made the most gains. There’s a lesson there somewhere.
2/23 – Total income at $38,221/annum. On track for spending < budget now in Feb (monthly dividend/other part now at $2,436). Next month, we’re taking a week off to go see family so a drop in income and increase in expenses I guess. Oh, except the dividends don’t stop coming when I stop working – woot!
2/21 – Total income at $37,933/annum. Get paid tomorrow so will be buying dividends some time this weekend after I do some analysis. OMG, Suncor is down to $31.52 today (I own a whole 50 shares left and am still up ~ 8% on those measly shares) and my Gasfrac is back down to a teeny 4% loss. Should have dumped the whole damn thing at a 65% gain. Greedy greedy. Yo-yos are fun. Except when they’re not.
Work has become (sorta) fun again. A good friend of mine has joined our sister team on the OM&A side (I’m on the capital side) and I’m much happier as an “individual contributor” and not a manager. I feel the weight of the world on my shoulders when I feel responsible for everything and everyone. Now if only the ego would step aside too. Our new manager is not like me – not a process or thinking person. And I think she underestimates what she’s taken on (it is very hard to work with/for a hard core workaholic whose life is their job). Oh well, not my problem any more.
It’s odd, but I feel quite tranquil about my losses so far this year. This downturn is just another buying opportunity. I’ve played my cards as well as I could at the time and feel quite fatalistic about the whole thing. At the end of the day, if I feel I have to or should go back to work next year to reach my goals, then that’s what I need to do.
2/6 – bought another $300/year in dividends – PIC.A and TBE. PIC.A (13% yield) is something out of the norm for me, will write more about it later.
Had a good call on selling Suncor at $34 last week – missed earnings and a few other things and down ~ 5% today. I’ve made a ton going in and out of that stock over the years. Crappy dividend, but it goes in and out like a tide.
Sigh… every once in awhile I dream of cash. Just not yet:
2/3 – Gasfrac did drop some more so my gain on the remainder is only 25% or so. Oh well, could have gone either way. Most things I’ve sold lately have gone up by quite a bit after I sold (RIM, Bank of America, Teck only a bit), so you never know how much to dump and IME there doesn’t seem to be black and white clear rules to this. Yet I think there are some tricks that I’m not using to trade better. Fundamentally, I *knew* RIM would likely go up more closer to the BB10 release date and that’s what I was waiting for but sort of got spooked. Or short-term greedy. Probably both.
I’ve read quite a few books on technical analysis recently. Oddly enough, an older book has explained it the best: Stan Weinstein’s Profiting in Bull and Bear Markets. Here’s a thread that goes into it a bit:
And a summary:
I’m hoping that it well help me counteract some of my frugal “buy cheap” tendencies. Using the m.o. in that book, I wouldn’t have sold out of RIM, TEK and BAC when I did and would have waited and had a larger profit.
Another good one was Run With the Herd – having institutional buying support under a stock is huge. The business person side of me wants to believe only in fundamentals, but I think that’s naive thinking when it comes to the market.
Spending came in at $2,439 in January with stock gains (including dividends) at $3,301. Basically, all profits came from dividends. That’s not good enough and I must learn to do better.
I was reading some of Martin Pring’s work (big TA guy) and he called the coming bear in 2006 in some articles I read dated back around that time. If you were a 60/40 buy-and-re-allocator once a year, I don’t think your results would be pretty if his predictions in 2012 are correct and I believe that they are. Or, you know, you could just adjust your SWR to 2% or something cuz heaven forbid you have to learn how to manage your money better on the income side and not just the expense side. His newest book is next on my Amazon wish list: Investing in the Second Lost Decade – had to wait until February to buy it since I was over-budget in January…
1/25 – well, that was good timing. Gasfrac started taking off in the morning and by about 9:30, the momentum started to slow and the spread between bid and ask was narrower. That’s a sign of a turn. So I dumped 20% at $2.85 (65% gain pour moi) – it hit a high of $2.89 and then fell like a rock to $2.46 or so by the end of the day. My god, I love this game!
It’s not that I don’t think it’s possible to go higher or anything… but a bird in the hand is worth two in the bush. It took me about 5 minutes to explain this to my son. So you have a bird in your hand. You see 2 birds in the bush over there but you can only fit one in your hand. So you let go of the one you’ve got to try to catch the two that you see. But you can’t catch them because they flit away. So now you have no birds. Because… you’re greedy. Greed is not good. (Having said that, I was in a super good mood all day at the thought of making that good timing call – even though the remaining 80% of my stock dropped by almost 9%! Maybe I too would rather be right than be rich… LOL)
Here’s a couple of stocks I’ll be looking at this weekend – Fortress Paper (FTP) – which dropped almost 20% on the news of the delay and increased cost in their cogen plant. Trading at $8.69 with a 52 W high of $40. I smell a deal. Also looking at High Arctic Energy (HWO) – they just introduced a dividend too. They’re at a high right now, so I’m just putting them on the watchlist to keep an eye on. I prefer doing my due diligence ahead of time though so I’m prepared to buy quickly if shit meets fan.
1/24 – boo, down to $7.5k gain this month!
Gasfrac is up (for me) by 57% today with a 13.98% gain for the day. I can’t find any news on the reason behind the surge – interesting article by Saibus Research over at SA on why investors should have stayed away from it back in November. Whatever.
The momentum and volume tell me that it’s going to keep going for a bit here. But it’s driving me crazy that I can’t find out why such a big move now, except that maybe the well they worked on with Shell was a game changer. I said I was bullish on the technology when I bought it this summer, and I still am. What the hell do suits in an office building know sometimes.
I decided to pay down the LOC with the Suncor sale and my paycheque. It just bothers me to have debt except as a (very) short term play not as a way of life.
1/22 – yay, up over $10k this month! I decided that since my yield over cost is pretty good and since I’m focused on income replacement and not “THE NUMBER”, I will start tracking my dividends and not the pot. If I had $50k/year coming from an initial investment of $100k, I’d be happy as a clam, so (IMO) the number doesn’t really matter. I guess people use it for bragging rights or as they’re accumulating, or if they’re doing that 4% withdrawal thingie, which I’m not doing. I’m not doing that because I know me, and I know I wouldn’t want to draw down and cash anything in. At least not yet, maybe some day when I’m older. Well, except that I wouldn’t hesitate to sell out of everything if it looked like the right thing to do.
I was reading this 82 year old guy’s comments on SA, and he’s invested in high yield, medium risk companies for the last 30 years and has done very well with that m.o. According to him, his portfolio is north of $2MM. Sometimes you can’t tell with men though, they tend to exaggerate the size of things.
1/21 – a bit green today. I’m up 1.9% this month so that’s nice. Gasfrac is the top gainer (after being the biggest loser at one point). Sometimes it’s good to go with a good company that’s really really cheap. My sale of Suncor on Friday settles tomorrow and I also get paid tomorrow. I’m getting tired of giving the government $5000+/month… or 167% of what I spend personally every month. So there’s part of the motivation to build a dividend portfolio – it drastically reduces my largest expense.
1/18 – green day today. Sold the Suncor I bought in May (@$28.40) today at $34 – about a 20% gain. As an apology, I went to their building to have lunch to celebrate sticking to my diet this week. Because work makes me fat. So I had a veggie spring roll (not the deep fried kind). Since they’re only like 80 calories and my budget gives me 500 for dinner, I picked up T-bones (on sale) for supper. And resolved to learn how to make veggie spring rolls.
Anyway, I’m going to have a look this weekend at what to replace it with. Replace that 1.5% dividend yield with something a little better. Petrobakken’s getting hammered – might pick that up. Surge too although no dividend on that. I’m not sure what’s up with them, their guidance looked decent to me. I read a good analysis today on Gran Tierra (another of the Colombian’s I’ve been stalking.) Maybe I’ll pick up all three since I have some (new!) RRSP and TFSA room and will then have about $15k to play with when I get paid next week. It’s nice to see the O&G market low when I want to contribute for a change. I might make a rule of not buying dividend payers in the TFSA and LIRA. I can never get enough cash accumulated in there to make much of a purchase it seems. Or I could (gasp!) DRIP I guess.
1/13 – David Merkel’s 8 rules of investing
1/12 2013 outlook
The classic Jesse Livermore: How to Trade in Stocks
1/11 – Good news that I hadn’t included the dividend-bearing PBN shares I got in the PBN/PBG split – so there’s another $108/month that I hadn’t accounted for. Up to $36,836 total annual income. I’ll try to make it to $40k by the end of this year. If I do, I’m paying someone else to put in the new kitchen cabinets and maybe buying a new fridge. Woot!
Recipe: Buy P/E <10, debt <50% equity, wait until a gain of 50% or 2 years. Easy peasy.
1/9 – Interesting that Legacy is still moving up at a good pace. Do I smell another takeover??? Gasfrac has had some good gains these last few days. I’ve heard that they’re getting a new CEO. Note to self: Patience is still a virtue.
1/8 – some strange hyper activity in the value stocks – so we wait
10 market insights – good article
1/6 – The Brooklyn Investor with a fabulous post: The fiscal cliff doesn’t matter (basically stop dicking around with your portfolio). He also has a few analyses on Apple.
1/4 – Eureka, I’ve found it/him!?! (I hope.) The magical professor – a full-time RVer and investor at Investing for a Living – he uses Mebane Faber’s Ivy Portfolio.
His wife runs the RV’ing blog Wheeling it. My favorite post: Back to Boondocking Basics
1/2 – OK, since my Petrobank is splitting into “new Petrobank” and Petrobakken shares at 12/31 … AND… my PBG kind of went from 60 to 0 in 1.2 (well not really 60 and not really 0 and not even 1.2, but kind of like that) I actually don’t know what my real balance is at the end of the year since it looks like I have squat in PBG but no replacement PBN yet. I can say for sure that December was slightly negative due to
a bit of a speculative gamble deep value investing in Poseidon as well as my misinterpretation of the impact, duration and timing of the US fiscal cliff on the Canadian stock market (particularly materials and energy – basically I bought in in November and should have waited til December) and the YTD was pretty much flat. As in ZERO point some dinky number. On a happy note, it means there’s nowhere to go but up in 2013!!
Anyway, I’m going to put in a calculated number in the spreadsheet which will be incorrect, but not materially so. In other news, the RRSP had a gain of just over 15%, lost 10%-ish in the TFSA and the LIRA was up ~ 7% or so.
I made a number of behavioural, timing and tactical errors this year – some of them more than once – that I was thinking about over this Xmas vacation. Thank god for slack and the time to step away and think a bit. I’m going to go over every single move I made and figure out what I did right and where I was wrong and what I can do to change my approach. It’s only by examining how you do things and what’s working and what’s not that you can change and get better. And I would like to improve more than I want to be right I guess.
Total investment for 2012 was $106,410 this year (real cash – I don’t count mortgage principal repayments and stuff like that as net worth increases which most bloggers do for their own reasons since I don’t intend to sell the house and live in the moho any time soon – maybe someday for awhile though). It was easy peasy and we had everything we wanted – except more time off for mom and a trip with my boys. So that becomes the goal for 2013. I’m trying to figure out now how to fit in an RV trip to the Maritimes in the 2 month summer break window. 70 hours of driving one way is a bit much though.
12/29 – Ordway’s investment checklist – a gold mine for investors
and Ray Dalio’s (founder of Bridgewater hedge fund) Principles – possibly one of the best self-help-y / management books I’ve ever read. Reality – who knew it could be so awesome?
12/27 – Sold RIMM and backed up a little truck on PSN @ $1.50 – Scott Dawson, don’t let me down. Maybe should stop playing with knives. Especially falling ones.
12/24 – Something to think about: Learning to take small losses quickly
12/23 – It’s Miller time… Jeff Miller (aka oldprof) on Decision Time? (Blah blah fiscal cliff). What interests me though is his strategy on stretching yield on dividend stocks:
Stretching yield. My approach is to find some reasonable dividend stocks and sell near-term calls against the positions. If you did this skillfully, you could hit double-digit annual returns with significantly less risk than simply owning dividend stocks. The range-bound market of the last few weeks has been ideal for this approach.
Along the same lines, I bought the book Option to Profit yesterday and am half way through reading it. Acs writes on Seeking Alpha as well and you can get a sense of his writing style here: The Myth of Dividends
12/21 – what happened while I was spending my life savings in Costco… Really, that place is not good for deals if you know where else to look. Except dog rawhides which they have excellent pricing on.
Anywho… AFN was down BIG TIME (>20% and settled in at 10% or so) late in the day apparently. I don’t know why and I’m still up 7% or so, but I’m glad I have some cash to do some trading on Monday. I wanted some more of that stock anyway. Or I thought I did. But… my phone/yahoo app is showing a drop down to $12.90 (ie. 61.78% or $20.85 down)?!?! Either my phone app is wonky or my investing site is. Oh well, Monday should be interesting. It’s the last day of the year for settlement into 2012 and maybe it’s a good time to go garage saling.
12/21 – bought another $316 of dividends this morning (only $1,176.50 to go!) Got paid $9,890 – $4k to the LOC, $500 to pay off Visa and the rest to the investing account. I had a stink bid in for PSN at $2.82 but then had to go out for
breakfast lunch really with a friend and missed that 10%-ish rally. Ack! Also missed selling my RIM by like $.07 and she’s down by 16% or so today. Ack! It’s a game of inches/pennies. Oops, right. Not supposed to be “week trading”. Maybe I’ll get lucky next week.
12/19 – kinda flat today – here’s a good article: The market is not a math problem
I don’t understand my friend’s who were laid off and got severance. They all seem to be spending it?!? Oh well, they don’t understand my values either (freedom vs. new truck). The world would be a boring place if we all were the same. But I still think they’re crazy for not rolling the whole thing into an RRSP and avoiding the tax impact. THEN go spend part of the refund if you want.
12/18 – bought another $157.50 in dividends today ($1,492.50 to go or ~$20k in capital). The money came from… dividends! (My own personal DRIP program.) This was a toe in the water on Eagle Energy (red today) – which Mich from the Beating the Index blogged about in Seeking Alpha on his first post for them (sustainability of payout ratio and all that.) Yay Mich. The watchlist was Xmas coloured today – a few reds but mostly green – and some major green movers (eg. PWT up over 4%). It’s beginning to look a lot like Christmas…
12/17 – bought $1350/year of dividends today. $1,650 left to go to cover the disappearing child support. Yowza, I did not know that Seadrill paid a 9.1% dividend. Except I’ve got to buy it in the RRSP for tax avoidance / cleaner accounting. Extended my contract to April 30th today (that’s my final final end date) so I’ll be making a contribution again next year – maybe the last one? At a wild ass guess, that’s gross of about $60k less RRSP contributions of $10.8k = paying off the LOC at $48k now. What a coincidence.
12/15 – This FP article shows the bizarre mentality of the ultra-conservative: How two friends can save money by sharing a home, expenses and a plan.
I wonder how happy they’d be deferring the lives they want to live another 4 years if one of them came down with cancer. They were probably financially able to retire and take off in that motorhome years ago.
12/14 – have you ever had a charlie horse? Yeah, that’s what my arm feels like about every 2 minutes. It’s stress of hating the job, I know it.
Anywho, since the little guy turned 12, the expenses part of the child support disappeared – which I did not know. So there goes about $3k/year. Unless I go back to court – which I’m not willing to do. Let’s just say there are people that you don’t want to be exposed to or make angry. It’s just safer that way. So I need to come up with that much more in dividends per year (~$50k in capital) – or work longer. I put a sell order in on VDSI and FTNT that both got picked up at a nice gain and on RIMM at $14.02 (not there yet) which will give a gain around 20%. Tech stocks will be gone but that’s less than 1/2 of what I need. So I will work into 2013, hopefully only until March or so. I thought I could stick it out but the body is telling me no. Sometimes I hate being conscientious.
12/12 – More green. Put limit sell orders on FTNT (US tech co) and RIMM. Some divvy payers are at great lows right now and I’d like to pick up some more of them. Or pay off the LOC. It really bugs me that it’s out there – mocking me. And if I’m not working for most of next year (please say I won’t be), I want the divvies. With divvies, you get paid to wait for the prices to go up. Gotta love that.
12/11 – some green-ness there today – hallelujah! Gasfrac up 14%+ – no idea why.
The neck/shoulder/arm pain has moved down to my bicep. I think it’s partially stress related. I didn’t sign up for this. Not for a freaking job I couldn’t give a shit about anyway. Reminds me of the last time work made me literally sick. My hair was falling out in handfuls (seriously, little twonie sized bald patches that kept growing.) Quitting made my hair grow back.
12/10 – had a talk with my replacement today – yay, she gets it that I want to move on or at least step back. I’m going to try to have my cake and eat it too by doing something more part time. I just have to pay off that LOC and that’s the last goal to hit (for now anyway). The ideal is to work about 3 days a week and gross $9-10k/month. The trick is that they have to need you more than you need them so they agree to whatever you want.
A friend at work sold PSN at the bottom – bought 1000 shares at $6 something when I did my first little dip in and sold at about $3.30-ish (I guess I bought his shares). PSN closed at $3.70 today so I’m close to break even. Yay.
$BPENER – S&P Energy Sector bullish indicator on stockcharts.com
Basically, these indices divide the number of stocks that are acting bullish in a particular sector by the total number of stocks in the industry (S&P world). If the number gets too high, the sector is being over-bought and when too low it is over-sold. Wow, crazy squiggles in 2011. Too bad I was asleep at the wheel.
LOVE mitchad1′s comments on Seeking Alpha – eg:
Disclosure: I am one of the underemployed. Have graduate degree and worked in financial industry at higher than average level. Since 1997 I have been underemployed and make 60% less than my peak years in finance. However, I work 6 hours less a day, take no work home, and have more time for faith/charities, social activities, and family. Yes, I have less luxury items and live more modestly in a smaller town, but I am happy, healthy, and have as much or more disposable income than in the past (partially through my investment activity). Money does not drive me anymore, and I have turned down two unsolicited job offers in the last year to go back to NYC. They could not pay me enough to get back into that rat race, and they tried
12/9 – the 2013 budget:
|Monthly dividends/other income|
|Total mo income=spend||2,845|
Really should cut that cable bill down…
New blog on the reader – here’s an old but great post: Investing in 2009
Mebane Faber on Let Warren Buffett manage your portfolio
12/7 – uhoh, forgot to fill in my timesheet and only got 1/8-th of a paycheque this period. You know it’s bad when work is so busy that doing what you have to do to get paid slips your mind. Doh. Now the LOC is maxed – AND I have no money to pay it.
Because I only got a paycheque of like $700, I sold ~ $7k of Teck at $35 (was up ~ 25% from when I bought) and bought Poseidon at $3.51 this a.m. Also bought $2k of PSN yesterday at $3.30-ish. There’s being so risk averse that you’re wimpy and there’s careful and cautious. I’m curious to see how much PSN will cut the dividend by (since the yield is like 30% now). I will try and have some cash ready for that. To that end – I did my timesheet up until the end of Dec.
12/5 – Insider buying spree - hmm, I own 4 out of 8 of the Canadian co’s. Just window shopping anyway since I spent all my money and am living / investing paycheque to paycheque.
Screw it, let’s do it. I’m going to buy more Poseidon tomorrow a.m. – the stock price vs. valuation / PE is totally out of whack now. Sometimes it’s ok to do a little gamble with money you can afford to lose. Better than buying lottery tix (which I never have – except as part of a work pool ~ once a year where I was pressured into ponying up $5 or so.) This is a fundamentally sound business that’s just had some idiotic A/R issues. Wouldn’t surprise me if the CFO has to take a fall over this.
12/4 – wow, look at Sprott’s returns. I thought I was doing poorly this year – but that’s really bad. People pay other people to
manage lose their money? Really? And look at those energy returns – Nuttall must be a terrible sector timer.
Here’s another: Is stock picking just another hobby for men? (Looks down at chest… whew! Still a woman…)
Speaking of female investors – I loved Dividend Ninja’s interview of Susan Brunner.
12/03 – more bleeding – so I went shopping! Had some unspent divvies in the RRSP so picked up some more Longview and Poseidon. Yay, another $20 or so a month. These little things add up you know. Long view… how apropos.
I think I should write a normal blog post one of these days. Just not in the groove of it. Plus wackos are coming out of the woodwork in other old posts and it’s making me feel stabby and like not writing. I’m not sure if a short but appropriate “f-off” is a good blog comment response. There’s a lot of weird people off their meds out there and the internet brings them out like a zombie apocalypse. One hopes they don’t breed.
I’ve read so much great stuff lately – I wish I’d saved the links to share. Oh, here’s one: Kindly note the impending bankruptcy. So… I calculated my tax as if I lived in the state of TX – it was about 40% less than I pay now – interesting. When I moved home from TX about 10 years ago, my tax rate (plus health care) was almost the same as what I paid here in Canada. I think the middle class has to pick up the pace a bit down south. No comments on health care since we’re never sick and don’t use the system – luck of the genetic draw I guess. Plus I wait things out… probably too long.
A minor head shake – vegetarians who state that their food costs are so low because they don’t eat meat – who spend about twice what I do in groceries – and they have a smaller family. And they live in the US where food is so much cheaper. Boggles.
November synopsis – sitting at 4.4% gain for the year and a balance of $364,212 less LOC debt of $48,500 = $315,712. I’m trying to look at it as “share accumulating.” Oops, I don’t think I’ll be hitting the $350k goal this year. Maybe $325k if I’m lucky.
So I’m still under the target of $322k for November and that means I’ll probably be buying with the paycheque next week and not paying the LOC down. Orca made a big move up on Friday and I want to dig into what’s behind that.
11/29 – 2% up today. Yay. I only lost about 20 grand this month!
Did you know that most early retirees have over 3 years of living expenses IN CASH stashed when they pull the plug? That’s like $150k given the average rate of spending – and that’s not “waiting for awesome investment opportunities” money – that’s living expenses. This, despite the majority (on that forum at least) receiving pensions? Now that’s conservative. Maybe not as conservative as the expected rate of return (potential of negative?) Yowza, sounds like my index returns in prior years. I’m sitting at a return of 5.2% this year after a pretty scary drop this month – and not a hint of inflation – expected to go towards deflation as I get the kids out of the house and all that (we all get along so well that that’s kind of hard to imagine though). And I’m disgusted with myself at that rate of return. Oh well, have patience grasshopper…
11/28 – figured out my fixed income budget. $2,601 a month, $2,062/quarter and $800 even steven in the semi-annual / annual dividend category. Anyhoo, I’ve also got the quarterly dividends divvied up towards travel, renos and the annual insurance. It should be easy for me to stay under the $2,601 (that extra loonie might come in handy!) on a monthly basis. Total ~$40k/year and my spending with mortgage reduction for this YTD was $36k. But… no big travel in there and I want to go somewhere this summer. So something’s got to give (ie. summer camp of $860, work clothes for me of ~$700 – oh, and of course, the bus pass of $170/mo.) No problemo.
Yikes, haven’t been this rigid on a budget in years! Oh well, it’s good practice. Really kind of exciting in a strange, budget-y sort of way. I suppose it won’t be very exciting when we have to go to the dentist or the furnace (doesn’t) blow – fortunately replaced that 3 years ago.
It’s like another step on this long, long path towards being ready to walk away from work. And I feel more secure knowing there’s some structure there and I can compartmentalize into categories (this revenue stream goes here, that one goes there) – enough to make me feel safe but not to the point where I’d be having to carry around envelopes of cash and stealing from the grocery envelope to buy gas. The impulsive spender in me left the building a long time ago. She had to use envelopes for awhile… and not go into stores.
11/28 – work is painful – literally. I managed to get a pinched nerve in my neck and shoulder last week from work. I’m getting the minions (who are wonderful) to do the mousing + typing and I’m reviewing old school with (red) pen and paper on the current make-work / really-serves-no-purpose project.
Nothing new happening in the stocks – everything staying down/flat.
11/26 – Well, I did it. Crossed over to the dark side of debt. Went shopping and spent $49,400. Average yield on all worked out to 6% but $10k of the buys weren’t dividend payers, just on sale. The average yield on the dividend payers is 7.5% – yay.
Now I *have* to keep working to pay it back.
11/26 – stuff I might buy today: RPL, CPG (I’ve wanted it so very long and it’s at a decent price now), FRC, LNV, SGY, and more CNQ. Maybe NGL. Leveraging – what the heck. Will try to get enough divvies to cover the interest cost.
11/24 – In 2013, I’m going to try to live off dividends, child support (thank goodness it’s heavily in arrears – and that he’s slowly paying it down), and rent income alone and invest 100% of what I earn, tax refunds, gains re-invested etc. It’s a test year to feel comfortable walking away from work and to get used to the timing of the dividend payments while I still have the security of income coming in just in case.
11/23 – I’m sitting at a balance of about $317k right now thank to plowing $31k into the account this month so far. I might not have had great returns this YTD (5.4% today – eek!) but I can still save like nobody’s business. And I am learning things that I need to learn to be able to get through many years to come of investing on my own. Things like I could have walked away with a 28% return back in September if I would have had the cojones to cash out of everything. Next time I’ll know and get the timing (a bit more) right. I’m glad I dumped as much as I did at the Sept peak but wish it had been more. And to always be okay to wait until a really great opportunity presents itself. And maybe not to catch things on their way down, but to wait until they’re showing signs of going up (err… I think that might be now…)
Just because I have cash in the account doesn’t mean I have to deploy it. But sometimes I do anyway, forgetting that another, better opportunity is just around the corner… Anyhoo, bought 2600 (@ $1.79) shares of Pinecrest Energy today from the paycheck yesterday. Also bought some more PGF cheap yesterday from the C&C sale this week – yay, it was up 3.75% today. No clue why.
Dividends are sitting around $20k/year now. I still have a few techie stocks that don’t pay dividends – FTNT, VDSI, RIM… I’m happy to sit on them for a bit.
I’ve had 2 good returns on takeovers this year and I think I’ve figured out how that whole game works. It’s proximity and JV’s etc etc. Where there’s smoke, there’s often fire. I think 2013 will be the year of M&A (mergers and acquisitions). Areas I’m focusing on are Montney and Bakken. There are some benefits to hanging out with pipeline system design engineers on a regular basis through work. And engineers are kinda sexy.
11/21 – Yay! Go RIM! I knew you had it in you! (Up ~17% today.) Wait —> profit! Wish I’d bought more at $6.
11/20 – another friend emailed me today to ask me to come work with her. When it rains, it pours. I don’t know why I’m afraid of not being able to find work if I want it since this keeps happening over and over again. The blessing is a curse though – when I work, I work hard. So hard that I burn myself out and don’t want to work anymore. So I quit and take time off. Rinse, repeat and do it all over again. I don’t seem to know *how* to balance. But I am trying. But working hard gives you a certain reputation – which leads to job offers up the ying yang.
Pretty much all red today but I think the technicals are saying that there might be a turn around coming soon. I will wait to dive in until I see a few up days in a row. Or one devastating down day or a series of little down days – that would work too. We’re so close to bottom (I think?) I want some more CNQ & some (new) Iamgold and maybe some more Barrick Gold and Cameco. Trying to stay away from the high dividend payers since I can control capital gains, but can’t control dividends. I suspect I’ll be at the top tax rate again next year.
The answer – to the taxes and the balance thingy – is to take more time off next year. Baby steps… I’ve booked a trip to Banff this weekend at a little chalet (dogs stay free so Sparky can come!) Here’s where we’re staying – I believe we can go snowshoeing. Sparky loves snowshoeing. And I love Sparky.
11/19 – The C&C Energia mystery is solved – takeover. I sold out at a 46% gain today at lunch. Wish I had owned more. Lovely green day today & up about 2% overall – Santa rally? Poseidon was up 20.25% to $5.70 – too bad I wasn’t on the ball this morning or on Friday to pick up some more low. Too busy at work which is no excuse since I could have set limit orders this weekend. I just hate investing blind like that.
I got a call from someone in the company today to consider working on the ERP project for their team (instead of ours). It’s still not my area of expertise (which is consolidation and financial reporting I suppose) but it’s nice to be wanted in a way. Will see what happens. To be honest, I want time off with my little guy more than anything. And time to feel like life is more than getting up, going to work, coming home, rinse and repeat – day after day after day. I am tired.
11/17 – thinking about leveraging a bit based on how much I can pay back in say the next 4 months or so. That’s about $40k with 5% interest of ~$666 (uhoh, the number of the beast!) Offset that with dividends yielding ~8%+ (lots to choose from at that rate these days) and it seems like a no-brainer – IF the stocks have hit their bottom or close and IF they don’t cut dividends. Last time I thought about leveraging (in June), I kicked myself afterwards that I didn’t. I don’t regret actually having done it back in 2009 either. I could go higher since I should be getting a tax refund of ~$12.5k from RRSP contributions in March but my unsecured LOC limit is $50k. Agh! I should have got a HELOC. I also think there hasn’t been strong enough turn-around signals yet to go this route. Maybe I should be cracking open that technical analysis book this weekend…
Except I should be going in to work to do yet another stupid, meaningless make-work project – one of the “we’re doing it because we’ve always done it” types. And December will be busy because we’re doing accruals – at a freakishly low materiality level the likes of which I’ve never seen before at a multi-billion $ company. I protested but don’t have the control to say no and change policy. Man, I miss being a controller sometimes. Fortunately, not often. I think I’d rather take the kid to the new Bond movie.
Some good reads:
11/16 – Good Green Friday! OK, I’m done buying, you can keep going up now Market.
C&C Energia was a good pick – up 22% (10%+ today – no idea why – but I wonder if they’re going to convert to a dividend payer – they have the right profile), the Ag Growth International that I picked up on Monday is up a healthy 10%. Other stuff is pretty sad looking still, but my YOC on dividends is up by almost 1% on average which is pretty cool.
I read an article on SA that I can’t find again that explained more of the logic behind the losses in my energy high yield dividend babies. Something about ETF’s dumping blah blah blah. Here’s another article that talks about that article, but not the article itself (which was really good): Equity CEF’s – what to do when the bottom falls out
Lots of charts in this terribly depressing read: Why financial repression will fail. I like charts. Speaking of charts, I got my order from Amazon today! Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications. That sucker is HUGE. I’ll read it over Xmas. Nothing like reading about candlesticks and Elliot Wave Theory in front of the fireplace (it’s too big for the bathtub). In the order, I also bought The Uncommon Investor III by Benj Gallander which came highly recommended by a couple of other bloggers. Flipping through it, I’m severely disappointed in it – super basic (for an accountant-type anyway) and written in that weird style of semi-fiction Wealthy Barber style. Ugh. I’ll be giving it to my son and if he won’t read it, I’ll give it away.
I’m going to try to pick up another 1000 shares of Poseidon hopefully around $4.50 on Monday. Maybe some for the kid too in his RRSP. If they were highly indebted and didn’t have a good business, I wouldn’t do it but I think they’re fundamentally okay.
Here’s a depressing pdf on a depressing website: Shadow Stats-on hyper-inflation
11/15 – posts that I loved today:
As always, I love Aswath Damodaran (and he’s cute even when he’s power-less): Storms and Stocks
and Hell arrives to the market – what now? I don’t know WTH is the matter with me – I see it as a freaking awesome buying opportunity.
Speaking of which… Poseidon Concepts (the tanker co.) – did a super-tank today and was down like 60%+ (ticker symbol should be OMG and not PSN) – I picked up about $1,000 of it at $6.06 – dividend yield of damn close to 20% now. That falling knife thing since it’s down to $5 or so. I’m-a gonna buy some more tomorrow I think. People are pissed on stockchase. But seriously, I am too busy at work to follow this stuff or do any proper due diligence. My stock symbol should be BOO + HOO.
11/15 – early-waking-due-to-anxiety reading: G&M interviewing Eric Nuttall
Looking for stuff to buy next week… I already have a couple that he’s recommended in the convo. Yay.
11/14 – decimation continues – hide your eyes!
I’m getting hammered (I wish! – alcohol wise that is) in the market – to the point that I don’t even want to look anymore. It’s just like “yeah, the portfolio is red, whatever. Wake me up when it’s over.” This hasn’t happened to me since circa 2001 so it’s a good learning experience and good reminder that hubris, complacency and over-confidence is a bad thing. But do these lessons have to cost so very much?
Things I am grateful for today – that I’m still making a shit-ton of money and able to put away $10k+ per month to buy at a good time. Even though I don’t like the job for a variety of reasons, I’m determined to stick with it to meet the financial (and work) targets I’ve set. Maybe I’m building some character? Also that my dividends are going up. I so like the dividends. Which means they’ll be cut.
I’m frustrated that my m.o. does not work when things get stupid – buy a good company at a reasonable price / P/E and ??? profit???
Hindsight wish is that I’d taken more off the table than I did in September – and waited until things got stupid to buy. Like now. Or maybe a week from now. Or oh god, who knows, please make the bleeding stop time.
11/10 – researching Ag Growth International this weekend – growth co. + high / solid (ie. never been cut) dividend with a pretty sweet 10% drop to 52W lows on Friday. Hope it goes lower on the earnings report this week which should be bad considering the drought down south. Maybe not since the ag industry up here did extremely well this year. It looks like it has long-term potential.
11/9 – it’s been a painful week for the portfolio – I’m funneling money in and buying here and there – total of $25k in this week. I kicked myself a thousand times for not selling out of everything – and I mean everything – back in September and waiting until shit met fan – which I *knew* it would – but got too entranced by those 52W high possibilities. I also think I got too dividend crazed thinking I’d need them to live off of next year – which I actually won’t. Working for a month or so in 2013 covers the basic expenses for the whole year. Hell, my tax refund on $40k+ of RRSP contributions will cover all of my expenses as long as I don’t do something like put a new roof on the house. Anywho, I’ve lost $20k in the last week or so in this GTFO account and it hurts even though I’m still up for the year.
Blah blah – politics – who cares?
The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money. ~ Alexis de Toqueville – oops I think that’s kind of happening now
We can always count on the Americans to do the right thing, after they have exhausted all the other possibilities. ~ Winston Churchill
On a happy note (there always has to be one right?), my C&C Energia (O&G out of Colombia) was up 12%+. Yay surprise earnings! That kind of offsets the Gasfrac down 10%+. Just buy them already Calfrac. Or get a CEO that has his shit together.
Still crossing my fingers for a cold winter (not here, just down east) – which I think will happen with the El Nino. That will hike the natgas prices a bit.
11/7 – oh my, that was a rough, very down day. Got my Barrick Gold at $34.98 – closed at $36.15. It’s times like this that I have to remind myself I’m not a freaking day trader and am in this for the long haul. And that this is why I want to be working and have cash coming in – because I think the shit will be hitting the fan (more) at some point in the next year or two and I want to have a bunch of new cash on hand waiting for that. I don’t even want to see how much I lost today. I know it’s bad.
11/7 – Things aren’t confirmed yet, but I think I’m going to be coordinator for working on the implementation of the ERP budgeting module – yay! Don’t have to be a manager in a bureaucratic environment anymore and there’s an end to the project. I’m a project person, not a month after month do the same thing over and over again like you’re in Groundhog Day kind of person. I’m not sure how long this project will last – maybe a year or so. It’s another $100k or so in the account and another year of not having to draw out, so it’s all good.
Got paid a little over $7k today (man, that’s abnormally high – weird) with nothing to spend it on but stocks and Mastercard ($700) and I think it might be a good time to buy some of the gold miners I’ve been looking at for so long. Put a limit order in for $10k of Barrick this a.m.
In other news, I lost my $100 bet on the election to my son. I called it too soon (before the Republicans picked their muppet) – sort of like my stock buys… always buying a little too soon. Doesn’t matter who wins anyway IMO – the Fed will manage to fuck things up.
11/5 – stock I’m looking at this week: Eagle Energy Trust – 10.48% divvie + low debt – and a US operator (based in Canada – yay). It might be a good election choice. PMG was up 12.58% today on the earnings report. But I am still down over $8k for the month overall. It’s ok because my total dividends have gone up and that’s what sort of matters more (if I’m not working that is). It’s nice to have more than one benchmark to try to meet.
I have a bunch of friends that are getting laid off at a company I used to work at. I’m busy networking on their behalf to try to get them jobs. Damn, I wish I could get a package just once in my life…
11/2 – deja vu June – horrific drop in energy today. Why couldn’t this have happened in October? I’ll buy some more next week if it keeps going down.
The rubber meets the road at the contract job. Since my group is not going to be re-deployed, I’ve been asked to become a permanent employee. I have to think about this. Here’s the pluses:
- 4 weeks vacation + ability to buy another week
- 16 flex days per year makes it 8 weeks of vacation
- easy job (most of the time)
- good pay + good benefits + good bonus structure
- be able to hit way >$1M total investment worth in maybe 3-4 years and right now I feel like I’m cutting it too close for comfort but maybe that’s partly just not wanting to worry about these big market dips
- could probably cut back to an 80% work week if I wanted
- great people
- I have to / want to stay in one place anyway for the next 6 years while my youngest son is in school (this is a big-biggie)
- my somewhat irrational desire for freedom
- it’s not the kind of work I like to do but I could move into something I do like at this company quite easily since it’s pretty huge
- no more summers off
- sometimes I feel like a hamster on a wheel
11/1 – Wow, what a good day for the miners! Some of them anyway, but not Cameco – I picked up some of it at $17.98 today on a 10% dip and some more Pengrowth at $6.15 as well. Teck and Vale kicked butt at 5.93% and 2.95% respectively up. Teck pulls to the lead as the RRSP top gainer. Glad I bought some more low on that stock.
I’m super excited that there’s a rumour going around that Gasfrac is going to be bought by Calfrac for $5/share (currently at $1.69) and I bought at $1.80 and $1.53. The stock was up 20% today – so I’m breaking even again. Woot! I’m still totally bullish on the fracking technology they use, especially as concerns about environmental damage seem to be occurring more regularly.
Have to say it feels good to be making some decent money again. $3,347 up for the day. You start to question your sanity + brains when you think you’ve bought at a good price and then things don’t pay off fairly quickly. That’s the downside of watching your stocks regularly, but I think the upsides of being able to pick up stuff quickly and cheaply more than make up for it.
10/31 – I guess my server was down with Sandy – oops. So are my returns for the month at -0.1% and a loss of $331. The S&P was down -1.87% for October. So much for the big drop I was hoping for. Hate these sideways markets.
Hindsight wish – that I’d sold some stuff back around Oct. 18th when I was at 21%+ YTD. I’ve got about $25k sitting in my “high” interest savings account ready to go in the account (from savings from salary since the $18k I took out in September went into the RRSP), but I’m not sure what to put it in. And… restructuring is not working in my favour… I’m afraid they want to keep me.
Here’s some things I read this week:
This will help with a quick valuation: A valuation model for those on a tight schedule (that’s me)
“Diversification via index is a blend of idolatry, superstition, and a basic lack of common sense. It’s a notion that says instead of buying five or ten of the best run, consistently profitable, and financially strong companies that you can identify, you should instead buy a huge hodgepodge collection of stocks that, for the most part, you really know nothing about.”
“Investing in index funds is the expectation of (or at least the hope for) money but without the interest in understanding how it’s made. If you desire money, but want no part of its reality, just how successful do you really think you’re going to be?”
“As investors, we strive to compound at 10% or 15% or 20% a year or more not because we’re greedy or because we want to be rich above all else. We do it because we want to prove to ourselves that we can. We do it because the human spirit recoils at being told that it is incapable and inadequate. It recoils at being told that is average.”
How delusional is that? I want to have double digit gains… but… I don’t want to do anything… Good luck with that. It ain’t the ’80′s with the big boomer population investing in anything and everything, the big gains YOY – or the big hair.
Here’s a pic of my hair in the ’80′s. It was spooky big.
10/25 – yay, up $90 for the month – aka break-even
I accidentally bought PWT yesterday in my TFSA. I honestly don’t know when I made that buy order for $12.98, but it looks like I was the low bid of the day. It must have been when I sold the Alaris a couple of weeks ago? Really do need to keep better track of these things but I just don’t have enough time.
OK, on to some stuff that’s actually worth reading (ie. not my disorganized rambling):
Varan over at SA has a good instablog: 2011 was a good year for paired switching … love a man with a good back-test.
Brett Steenbarger’s blog TraderFeed – Core Ideas in Trading Psychology: Trading and Self Development
When I was in university years ago, I took a history course with my brother – a history/poli sci major. Even back then it was a dumb idea to be an arts major. He has more historical knowledge in his little pinky than I have in my whole body – but he got a B and I got an A+ in the course.
On the final, the prof told us what was going to be on the exam – basically he gave us a few essay topics. My brother didn’t believe it was that simple, so studied everything (plus he knew all this Greek and Roman history, so why study that much?) I believed the prof and studied exactly what he said would be on the exam – the night before of course. I never had much time even back then b/w having a baby, going to school full time and working part time. I just did a brain dump and promptly forgot everything about 2 minutes after walking out – just like I appear to forget setting limit orders 2 minutes after I set them.
The moral of the story is that sometimes we’re given the answers for things in life (or the market) but we insist on making our own mistakes and doing things the hard way. Even though it can make our lives much easier and our learning curve much shorter. Fortunately in the stock market, we can see if things work before we try them out – like with back-testing, simulated trading in practice accounts and the like. I just don’t think I’ve found my magical professor yet.
And if I only had the time to do all that…
10/22 – all dressed up and no place to go…
Rats, just when you’re hoping for a decimation in a few stocks, it doesn’t happen. But all the energies went down pretty much so I bought a bit more Encana (intended as a short term 5-10% profit play) – in the RRSP of course. Oh, what else was exciting… PMG hit oil in Peru and was up maybe over 9% for the day to close around 5.5% or so up. Yay, I have one green stock! Well, maybe two. Niko did another one of those drops and bounce back up thingies a few days ago but I wasn’t in the mood to play with it again. Man, did I mess up on the timing of Gasfrac – down to $1.30 or so from $1.80. Good reminder to watch and wait until something shows that it’s turning around before you put your toe in the water on it. I still want more of it, so will wait for a proper moving average trend signal. Should have known better by what I said when I bought it: “I expect it to go down.” Doh.
Also, I’m going to learn how to sell short. I sort of mechanically know how to do it, but have never actually done it. Might come in handy some time soon.
Here’s a good article from the Wall Street Journal I read today:
10/21 – It occurred to me today that the timing of my RRSP and TFSA contributions has been completely unconscious over the years and that’s probably a major factor behind the pathetic returns in the mutual & index funds I used to have. I’m a slow learner.
When I’d saved the money to contribute, or the opportunity was there to make new contributions (ie. new calendar/tax year), I made the contribution – ie. usually right away in January-March – often at the most expensive time on the index that there is in the whole year – well, except for Jan-Mar 2009. I guess I had more savings than brains since I did a rough back-test based on SPY & TSX historical values that showed that that poor timing has probably cost me a couple hundred G’s over just the last few years. Maybe more. The differential makes my head hurt.
This is why it almost makes me angry that all most (including me) PF bloggers talk about is save-save-save, be frugal-frugal-frugal, write posts about minutiae like not spending money on makeup or haircuts and extrapolating hypothetical savings on little crap over 50 years (during which I personally would look like hell frozen over for half a century). I can hardly bear to read that stuff anymore without throwing up in my mouth a little. And I cannot and will not write it at all.
Oh well, on a happy note, I think I’m on track to hit a 50-60% gain in the RRSP this year (not even XIRR, just gain / (beginning balance at June + contributions)). Better late than never.
Anyway, enough ranting. I’m going to look at a speculative stock timing play on Nexen and Celtic on Monday since the Progress Energy deal was (temporarily?) dismissed. I’m making a bet that Investment Canada has to approve some foreign investment and that people will over-react and it will happen fast. Maybe only $10k apiece since there’s some risk there.
10/20 – oops, lost yesterday’s update. Nothing major – down a couple grand with S&P YTD down 2.2%. So long good Friday’s.
New site to learn TA: Alessio Rastani’s blog – and an “oh boy” interview: “a recession is transferring money from people who aren’t prepared to people who are prepared.”
All rather depressing: Super Rich: The Greed Game
Jim Rogers is always fascinating: Jim Rogers isn’t buying China
10/18 – greener day and up $9800 for the month, 21.4% YTD (S&P 18.2%). Still doing nothing. Not at work though, had the day from hell. Work would be great – if it wasn’t for the people. What doesn’t kill you doesn’t make you stronger, it makes you bitter and want to GTFO.
I did read a great transcript of a Charlie Munger speech this a.m. before work (that early waking anxiety thing strikes again) from My Investing Notebook (great blog BTW): Charlie Munger Lecture at the Harvard-Westlake School where he disses on efficient market theory (does anybody still believe that crap? – I sure hope so!), opportunity cost, envy, personal responsibility and the 2008-09 market.
I wonder if index investors are really speculators? By Munger’s definition, anybody that invests on price anticipation are speculators, those who look at the business are investors. Ergo, indexers are speculators. Makes sense to me. I can’t help but look at the business because that’s been my world for coming up on 30 years of work (longer if you figure that we were out working on the farm from the time we were 5-6 years old). Hell, I don’t really care what I do or what it’s called as long as it makes enough money to GTFO.
10/17 – green day and up $5,800 for the month and 19.4% YTD. Still waiting and doing nothing.
10/16 – waiting… making a little money… mostly from dividends… I heart dividends… waiting…
My son got dividends too – $40! Not sure why they reinvested, I’m sure I told him to tell the sexy bank chick to sign him up for non-DRIP divvies. He was probably befuddled at the time. Oh well, it makes more sense to DRIP when you don’t have much money to invest – especially if you get a discount.
I’m going to sacrifice my own portfolio by putting $5k into my son’s RRSP as soon as I find an absolutely-guaranteed-to-pay-off-in-a-few-years stock to buy for him. He’ll get a tax refund (or not have to pay as much – hopefully not too bad since he has CPP and EI calculated on 3 jobs), which he will turn around and give to me. As far as the rest, we’ll figure something out. He has more character in his little pinkie than most people have in their whole bodies. I want him to have enough for a first time home buyers plan full withdrawal in a few years ($25,000) when I boot him out – by moving. I just think it’s best to help kids out when they’re young and need the help rather than leave them hundreds of thousands of dollars in your will when they’re in their 60′s or 70′s. And I feel that kids his age have a bit of a raw deal in the economy with housing costs etc. compared to when I was that age.
10/15 – waiting… reading… waiting… losing a little money… waiting… reading…
Here’s what I read lately that I’ve liked:
Get your dividend growth “off the grid” by Five Plus Investor over at SA – lots of Canadian picks that Americans might not have heard of and Canucks love
Time to dumpster dive? Not yet! by Alan Brochstein at SA – but it’s close, I’m feeling that it’s close
And the weekend book(s): Sam Stovall’s The Seven Rules of Wall Street AND Justin Fox’s The Myth of the Rational Market (I can’t help it I’m a fast reader)
I also scored a first edition of To Kill a Mockingbird at the library book sale this weekend for $1. Not that I’m planning on getting rid of it, it’s nicer than the paperback edition I re-read every year or so.
10/12 – busy today & bought Vale S.A. after researching mining last weekend. The short list for the mines I wanted was Teck (already own ~$15k), Vale, BHP Billiton and Rio Tinto. I chose Vale for a variety of reasons – one of them being that it’s out of South America (Brazil) and was showing the best numbers – esp. P/E. Picked up 700 shares at $18.18 or about $12k worth. A little room there to buy some more if it drops. And wonder of wonders, they have an annual 6.3% dividend with an ex-div date of Oct. 17. Yay $400 or so.
10/11 – I was busy with month end today (of course) so couldn’t / didn’t pay much attention to the market. Petrobakken and Petrobank were both down about 6%. Will put in a stink bid when I get up tomorrow morning. Just too tired to think straight. Methinks I’m getting old.
10/11 – up at 2:30 a.m. today – ugh, it’s month end and I’m stressed. I’ve been doing some form of this occasional madness for over 20 years. Too long. I used to actually like it – when everything was under my control. At a couple of old jobs, I used to just suck it up and go into work at 3 a.m. since… you might as well get something done on what you’re worrying about. I don’t like worrying. And I don’t like going to work at 3 a.m. I don’t like going to work period anymore.
When I was winding down this oil / trading company last year, I’d go in maybe 2-3 days a week at around 9, work my butt off for 5-6 hours and get out at 2-3 p.m. I could have drawn out the work and made a lot more $. But why?
But I’m surrounded by a culture of the measurement of hours, not results. Everywhere is like this. What’s wrong with these people? We had a meeting amongst us managers a few weeks ago to talk about what would be on our “productivity scorecard” (oh please). One suggested that their productivity should be measured by how long it took to respond to emails in their joint inbox. I couldn’t help myself with the conversation-pausing: “Is this a fucking call-center?” Sucks to be an INTJ surrounded by
other types inefficient people.
Good article: They work long hours, but what about results?
10/10 – EW up 3.79%, Niko down 8.46%, AuRico Gold – the one that’s always eluding me and on my #1 watchlist of “stuff that’s close to my price” (not anymore) – up 21.41% today – the richest guy in Mexico, Carlos Slim buying a mine I guess. I wish that mine had been part mine.
This analyst is downgrading AuRico to watchlist #3. I wore a red winter coat today (no shit, it snowed) – and guess what? The market was red!
Take that DALBAR (I canz do my own invezting and no be total idiot wit sum buyz hi sellz low?): Does the DALBAR study grossly overstate the behaviour gap? Really now, if everyone was that stupid, it would be easy to make a killing in the market.
10/9 – well, I just had to look back at the one I left – Niko down 6.48% today. Woot! Timing-is-good-for-me, good-for-me, good-for-me.
Speaking of timing – Damodaran on Contrarian Investing – Going Against the Flow
I’m going to examine this with a not-real-money experiment trade in an industry and with a stock I know absolutely nothing about: Edwards Lifesciences Corp (US stock, symbol EW). Plummeted 21.24% today from $107.41 to close at $84.60. Good EPS numbers, low debt, good cashflow, everything I like in a stock (although the P/E is high and it’s still not at a 52 week low. I really like 52 week lows.) Something came out about poorer sales #’s than expected in Q3. Analysts still pricing it around $100 (not that that means much sometimes). Cuz, you know, it’s all about the earnings in 3 measly months. Irrational disappointment? Let’s see what happens.
I stopped by the real estate investor’s desk today and asked “anything look good?” Nah, he’s waiting for the sell-off, just like me. Cross fingers we’re both right. I dumped another $10k of COS at $20.90 today. More cash please. Lots and lots of cash.
Ooh, apparently I don’t have to make a mortgage payment this month apart from that $110 interest adjustment I paid Oct. 1. More cash!!
Quick little comment on SPY – at about $118 in October, 2011 and $144 today – isn’t that so gosh-gee-wonderful that it’s at the same price as it was back in late 2007? Get your helmets on kids and make up your Christmas wish list, we might be going tobogganing soon.
10/8 – Margin of Safety notes
Some analysis on the Buffett Partnership – circa 1962
10/7 – a post so brilliant I want to cry: How to Boil a Frog
And another goody: How to improve the quality of our decision-making
10/5 – I had a couple of notifications of job changes from people via linkedin today. Heheh, one person that I used to manage is a controller at a company I’m interested in investing in (a lunch may be in order) – and a director I used to work with found a new job. I’d like to put in an updated status one day of “retired – and not fucking interested in a job, thank you very much” for my status. I have “widowed” (as in most men are dead to me) as my status on facebook, so that’s kind of like the same thing?
OK yeah, can I take back that bumping up of the Niko price past $18.12? Feel like the E-Trade baby – waahhh. 1:50 p.m. – out at $17.62. Why not try to let it ride a bit more? Because everything else is gloriously red today and I’m hoping for some great buys next week and want some more cash. Lesson learned to not be too greedy. Just a little bit greedy is ok though.
10/5 – stuff I read at 4:30 this a.m. because my dog didn’t get the message that I have the day off and wanted to sleep in:
Andrew Ang’s paper: Equities Market Level
Mebane Faber’s Noise & The 10 Best Days
OK, I get this thing about *missing* the 10 worst days. But what about the person who doesn’t “miss” but *buys* on the 10, 20 or however many worst days? How do their returns look?
10/4 – Crikey! I totally don’t know what to do since Niko isn’t behaving according to plan. Same kind of nonsense of going up in the a.m. and stabilizing mid-day at 6% up or something. So we keep on going past a 75% gain and I had to revise my sell price. Gaaad! When will it end?!?
It was a green day today. Boo hiss. Made something like $3k today. Didn’t the oil market get the memo that it’s October and IT’S SUPPOSED TO GO DOWN??? Goddamn Europeans are messing everything up.
10/3 – As the World Turns (for Niko anyway)…
Fascinating stock to watch. It started off all bullish and got up to a high of $17.75 (up over 10%) early this a.m. and then free-fell down to $15.20 and flat-lined for the remainder of the day to close at $16.40. It’s like a sign or something (I think?) Anywho, I set a sell target for $18.12 (like a battle date isn’t it?) for a couple of days for the rest because I’m tired of watching it and don’t really like this company. I’m taking Friday off to do shit with my family (yes, I do have one) and traditionally the Fridays before long weekends are good gainers. Hmm, I should look up some statistics for that, but feel too lazy right now. Maybe I read it in a comic book.
Red day, so I’m down for the month. Finally. Not enough to buy though (-.2%). Trying to learn from my mistakes of always buying a wee bit too soon.
10/3 – a new blog on the reader: Off-Road Finance with a great post Why I’m a speculator rather than an investor
10/2 – Sold half of Niko at $16 when it hit over a 15% gain today, 64% or so in total and *my* fair value calculation (which I’m not saying would reflect market irrationality). I didn’t see the long-term upside in the news that came out on it on Sep. 28 (eliminating dividend – not that I was in it for that – and moving the rig to Indonesia where others have come up dry). I’ll leave in the rest and play it by ear. Got out of BAC at $9 something – yay.
Bought Gasfrac at $1.80 today – only 1500 shares since I’m sort of expecting it to drop further as I don’t think their Q3 results will be very good. I’ll buy more if it drops further. But who knows, maybe they’ll see $4 again this winter with positive Q4 earnings. Unlikely to see their highs of $14ish any time soon. But I really think their technology has some potential upside.
BNP finally took off with a 4.77% up day – increased distributions I think. Whew! I was starting to worry about that one! Monthly dividend yield is 7.81% now. I’m hoping that it will hit $25 by January/February (now at $17.72).
1% up for the month and 19.1% XIRR – not bad. Also turned the heat on when I got home today for the first time in months. That’s not too shabby to get to October without firing up the furnace. Time to dig out the flannel sheets and goose down from storage. Hopefully Sparky won’t try getting onto the bed… although I suspect that he sleeps on there when I’m gone during the day. The origin of the term “3 dog night” is for when nights were so cold that you had multiple dogs sleep with you to generate some heat. I just want my cozy binkie.
Speaking of cozy binkies… I really shouldn’t have bought COS in my RRSP back in September. What was I thinking?!? Nice stable stock with a nice dividend, but like Husky, it’s not a mover. I can haz capital gainz??? I’ll dump it as soon as I find something else to replace it with. Sorry COS – me no love you long time.
10/1 – Little green day – up about $2k. Ack – Niko is up 41.74%. I’m just waiting for it to turn around and go on the backside before selling.
Sold the Alaris BDC out of accounts. I think it’s a good stock to be sure, just not good enough that I can see 50% returns possible in a few months. Natural gas zoomed today with UNG and Encana posting gains of just over and under 4%. That’s pretty cool.
I’m dumping my BAC stock – am a little bit concerned about the FASB effect this quarter and am hoping for another buying opportunity in it with some horrific earnings numbers this quarter. Oh well, got my 80% or so gain out of that one, not really interested in holding out for the 4 bagger I was hoping for.
A pretty good book that I’m reading this week is “Trade Your Way to Financial Freedom” by Van Tharp.
I’d like to see personal finance sites be like cooking sites – where there’s something like some street cred out there. Saying that it’s impossible to stock/sector/market-time (when you’ve never tried to do it), is like posting a review on a recipe that you’ve never made. Possibly you’ve never even cooked kraft dinner or seen a stove. Just don’t do it. Please. It’s insulting and just makes you look like an idiot when some people have made whole careers and fortunes out of stock-timing, real-estate timing and various other kinds of timing. I don’t think that *I* can “market time” – well, except back in 08-09 when it was super obvious unless you were mentally deficient (or oblivious – and hey, I’ve been oblivious too!), but I know I can “sector time” and certainly “stock time”.
Speaking of a great time(r), I listened to a few lectures by Walter Schloss this weekend while I was cleaning.
It kills me how many times I heard WS say “I don’t like to lose money.” Me either, Walter. Me either.
September synopsis – finished funding the RRSP this month for a total of $40k this year. It’s just sitting there along with cash from sales on the stocks that got toppy this month, mostly sort of unavailable – in the form of stink bids. I calculated what I need for a monthly draw when not working at around $1.5k. Anything on top of that $18k/year will go to equal parts saving (covers inflation) and travel (max $6k)/renovations/large purchases (max $5k & includes donations). If I have a losing year, I’ll go back to work. Maybe. Nah, I’ll just buy a lot of cheap stuff on sale and wait for it to go up.
The strategy on Niko will be taking out my original investment and letting the gains ride. Or losses. Either way, I’ll have my original money back.
Here were my end of August XIRR standings on the tax deferred accounts: LIRA: 65.8%, TFSA: 36.2% and RRSP: 58.1%. Now with an additional month, they are: LIRA: 53.1%, TFSA: 1.2% (gasp!) and RRSP: 68.9%.
So what went wrong in the TFSA? Petrominerales, that’s what. I decided to have that account evenly split into one very stable dividend payer (COS – it hardly moves at all but pays a 6.6% dividend – well 7% when I bought it) and one higher potential growth stock. So that pot looks temporarily sad b/c the growth stock is sad (right now). Oh well, better returns than my high interest savings account and I do see that account as an emergency fund of sorts. The RRSP increased despite a drop in the market because I took quite a lot of profits at a very good time and that’s where I dive in full-on and buy as cheap as possible. So everything is still at a positive gain in that account except for Bonterra at a 2.09% loss – bought too quick on that one being a crazy dividend chaser. If I could withdraw the profits taken and show that effect, my XIRR return would be closer to >100%. Still only 3.5 months so not very meaningful. Let the dirty market timing continue since it’s working, I say. And it’s incredibly entertaining.
9/28 – Niko was up as high as 10% again today but settled in at 8.8%. My gain is 38.57% in total in 16 days and I don’t think it’s done climbing yet. Wow. Overall flat day with nothing exciting (on my radar anyway – maybe I need a bigger radar?) going on sale. Just have to sit and wait like a cat at a mousehole.
On a happy note, I finally got off my lazy butt and got my cell phone bill reduced from $103.95 to $66.15/mo. today. Maybe it’s just me, but when you’re pulling in $20k/month from various sources, saving $37.80/month isn’t a really high priority. Yet it annoys me to pay for services I don’t use and I won’t always be making this much (hopefully soon), so I’m glad I finally did something about it. I also filled out my whopping $75 expense report – just 5-6 months late… Yeah, it was a slow day at work.
9/27 – Ratzenburger – it was a green day. Big mover of the day was Niko at 8.8%. That’s rather exciting.
It was my youngest son’s birthday yesterday (12 y.o.). His present hasn’t come (yet). He asked for one game that I believe won’t be released for a month or so. I didn’t buy or bake a cake (yet). All I did was take the afternoon off work to surprise him at home when he got home from school. We sat on the deck, talked and laughed (apparently I crack him up), and played with the dog. He’s said so many times that all he wants is for me to be home with him and to be happy. How could I not try to do both? I’m truly blessed. Sometimes I read about other people’s kids throwing temper tantrums and such and just can’t relate. My oldest threw a temper tantrum once when he was about 2. I laughed myself silly (it really was hilarious) and he never did it again. I guess it didn’t produce the desired effect?
9/26 – Down but not enough. Maybe tomorrow…
On a happy note, I got my mortgage adjusted down to my original payment range today ($705 bi-weekly vs. $867.35 monthly) and got it switched to monthly vs. bi-weekly. It’s about $660 in savings – err…. “not spendings” / deferred spending per month. I’m not getting rich off a 3.4% return any time soon plus it gives me additional leeway in the monthly draw. A 5-figure mortgage at crazy low rates is not anything to be concerned about paying off (IMHO). I wasn’t even up for renewal apparently, so am surprised that it was so easy peasy to do.
9/25 – Hooray, the market is falling, the market is falling! Woot, looks like I’m getting another kick at that can this year. Too bad I didn’t sell more at the highs. Noted for next time. Part of me wanted to sell the whole portfolio which would have been kinda fun. Oh, I bought a bit more Bonterra but that was it for activity. It still has about 25-50% of a gain left to go to reach previous moderate highs, so it feels safe at this price.
Here’s a great little retirement calculator: i-orp.com
I found it while trying to figure out my taxable / non-taxable accounts de-cumulation strategy. For Canadians, just count the RRSP as an IRA and the TFSA as a Roth (although the Canadian plans are better since you can withdraw your RRSP whenever you want). It was a good confirmation that I’m really quite excessively conservative. Too many years of living on one paycheque and saving the other (or even 1/2 of the second one too) has made me hard-wired to want to save it seems.
I included $100k of my house equity for downsizing and an inflation rate of 3%, returns of 7.5% (measly, I know and dividends should make up the bulk of that) and came out with spending of $54k/year if I retired today – which is more than I spend now. There’s nothing for it but to travel more. Nothing burns up the cash like travel. Except I don’t feel like going anywhere which is kind of a bummer. I do feel an urge to hit the Maritimes or San Francisco this summer though.
9/23 – Eurozone bailout… hmm… might be a good trading day on Monday. Or not.
9/22 – I was reading this thread at ER-org about someone not being happy with their portfolio returns of 11% over the last couple of years.
Someone smart piped up with the following:
If you’re not going to educate yourself on what to invest in, then you’re going to get lousy returns that barely beat inflation. If you want big returns you need to be looking for specific sectors or stocks that have great growth potential.
Look into precious metals and commodities, specifically the miners. My average gains over the last few years are in the 100-150% range per year in this sector. I still think there is a long way to go, considering FED policy and world wide currency devaluation.
But of course the other frogs in the boiling pot tried to pull him/her back in saying stuff like “no it can’t be done”, “nobody’s that lucky”, “don’t even try, buy index funds”, and the LMAO priceless: “I’m happier earning 9% than I would be earning 100-150%”. Best to not say anything about what you’re doing in those kind of environments and just laugh all the way to the baaa – nk. Or like s/he said: “I guess the best advice if you want higher returns is that you’ll first need to grow a pair.”
I think I’ll PM that person and ask for some advice. Proving once again my theory that people would rather be right than make money.
Oh, neat article on seeing the Galapagos Islands on the cheap. I priced out regular cruises and they were all upwards of $5k/pp. Pretty pricy for a family of 3!
And I found this gem at Cracked: 6 logical fallacies that cost you money every day.
Re-read PJ Eby’s article “How to decide what you want” – have been thinking a lot lately about what kind of lifestyle I really want and how much that’s going to cost. I don’t want to settle for what seems reasonable or sensible to have, I want it all. In conjunction with this, I’ve been thinking about my old est learning in the area of possibilities and how to make what I want happen.
9/21 – Well, there’s a lesson to be learned here somewhere. That BTO I picked up was up 9.3% today (13% overall) and my Niko? Up 16.5%. BTO I might dump but Niko I’ll hold on for another 10% or so (at 20.3% gain total right now). The lesson is one of timidity. I only bought a grand of BTO and about $5k of Niko. I’m 3 for 4 in my calls of buying (although I didn’t buy AuRico when it went down 22%, I came very close to doing so and it bounced right back up like Tigger. Or my dog when I walk in the door from work.) PMG in the short term I’m not right on, but I’m still very confident that it will be close to doubling in a few months. So maybe that’s 4 for 4. Faint heart never won fair maiden and all that. Up to a gain of 7.4% for the month, 25% XIRR for the year, $23.7k gain for the month.
I’m looking for patterns. If there’s a dividend cut, what kind of drop should I expect to see? And what kind of subsequent rise? What about a dry exploration play? A bad earnings announcement? An acquisition announcement? I’m not sure what it is that I’m really trying to do here. Event trade? I dunno, but it is a lot of fun. I suppose it wouldn’t be as fun if I was losing money…
9/20 – Back up to 6.8% this month and 24% annual with a $21.8k gain this month. I picked up some of that BTO gold stock in my TFSA for $3.70. It closed at $3.87 – yay. But I was just putting out a feeler for a thousand bucks. Petrobank is buying back shares and selling Petrobakken – they were up 4% and 2% + respectively today. We’ll see what happens tomorrow. I’ve kind of cleared my schedule and got everything done I need to do this week so I can pay more attention to the market, periodically check in throughout the day and dump something if things get crazy. Because …. you know… it’s Friday.
9/19 – Boohoo, I’m down to a 5.8% gain for the month and 22.1% for the year. This yin/yang of wanting things to go up, yet wanting things to go down so I can buy is crazy making – but not un-enjoyable. It’s like the kid in the car: “Are we there yet?”
I had a look today at B2Gold which dropped 12% or so today. I want some gold stocks but don’t like the prices out there – no way. I’ll do some research this weekend.
When to sell? This is hard to figure out. Not so much when but how much? I think greed is a factor in there. I look at my returns and think something like – ok, $48k in gains in my taxable account – good enough to sell since I don’t need any more than that since I don’t spend that much. So I sell. But I think that’s atypical. I always see some disaster looming around the corner and that my good luck will be gone. Maybe that’s not such a bad thing.
9/18 – well, that was good timing. Dumped some Baytex at the day’s high of $50 and picked up Bonterra at $45 something – which actually gained today. Oooh, got it at $45.40 and it closed at $45.94. Yay. Overall, a red day, but not red enough yet to go all in buying like a crazy woman. Pennwest was down over 4% – I’m glad I dumped another $20k on Friday at $16 but still have about $63k overall. I sort of set my limit at $40k (market value) for any stock and I’m still violating that with that stock. Lesson learned – if an up/down movement on a single stock moves your balance appreciably, it’s not a good thing. Good thing – that my buys today all gained by COB. Yay.
I’m so excited that my team is going to be restructured – for sure. So I can go on my merry way without burning any friend bridges. Maybe a month and I will be free again. Permanent people are kind of choked. My whole work life has been uncertainty after uncertainty (mostly self imposed) so I’m pumped. Volatility and shifting on the fly? Bring it on, I know you well.
9/18 – changed my limit orders this a.m. on PMG and NKO downwards and modified the sell price down on some more BTE and PWT.
Good lord, I have to get GRS off my feed reader. It’s a sad waste of time to read posts by broke people philosophizing about money. You start thinking like them and that’s dangerous. I read to learn, and if I can’t learn, at least to be entertained. There’s not much of either there. Woohoo – just cleaned up my feed reader. Wow, it’s short now. Good. More time for novels – and books about trading…
9/17 – put limit orders in today for Petrominerales and Niko at $7.90 and $10.40 respectively until the end of Sept. Everything was down a wee bit today (8.6% gain for the month of September pour moi). Oh come on, now that I have a whack of cash, please go down Mr. Market (ooh, that sounds kind of Fifty shades of grey-ish). I suspect we’re going to remain reasonably flat over the next couple of weeks. But I left my crystal ball in my other pair of pants. And I think it’s in the wash.
9/16 – Dude. You are late to the pah-ty edition.
Here’s a decent write-up on Penn West on Seeking Alpha: Growing, 6.75% Dividend Payer Penn West Petroleum Sees Improvement Coming
Only problem is, he should have been investing in it … oh I don’t know… back in JUNE when it hit 52-W lows of $12.50 and not now at $15.98 after an increase of over 25%. Sometimes I wonder who’s buying when I’m selling/taking profits. Now I know. Thank you misc. dude for buying my shares.
9/16 – I’m trying to figure out what to do with this 9% gain that materialized over the last 2 weeks. Should I sell more? Or should I hold on since I think there’s a lot of room left to grow? I think the answer is to “sell it down to the sleeping point.“ Having $100k in cash and the rest still at work is my sleeping point right now so I need to sell a bit more. But I’m going to do it in my non-taxable accounts. Just had far more capital gains this year than I intended.
I’ve referenced Howard Marks from Oaktree Capital here before – here’s his latest great post: On Uncertain Ground
9/15 – morning reading to think about: Sell Canadian Oils, Buy Airlines
I don’t invest like Chuck Carnevale, but I do find his posts on investing very clear, understandable, not too dry and applicable to many styles of investing. I’d like to write like him when I grow up and actually have a defined style. Here’s his latest: Don’t be the equivalent of a stock market racist.
Philip Davis has a good article out: QE fever turns into QE forever
9/14 – TGIF! Whoa – yes my theory of Good Fridays is holding steady. (Yes, I do know it’s a coincidence… or is it?)
Sitting at 29.3% XIRR, 9.1% for September, gain for the month of $28,561… and about $60-$70k in cash. Giggety, giggety – I’m out! A bit of a haircut on a whole bunch of stuff – Cenovus, CNRL, Suncor, Pennwest, COS, Baytex, not sure about Legacy – I think it hit my price… Bought some more of free-faller PMG at $8. BNP is being a dog. I have to figure out what’s wrong there.
I was talking with a friend and whinging about how I feel like my methods are too intuitive and not “technical enough”. But I’m not sure if that’s true. I do a lot of work to figure out what the fair value of a stock is which is strictly mathematical. And I refuse to buy if it’s not cheap. He said that obviously it works for me so maybe I shouldn’t question the method to the madness. It’s not about the means, it’s the end. And I’m having a boatload of fun to boot.
Anyhoo, I bought a CK purse today at lunch (belated birthday present to self!) On sale! (Although I fully intended to pay full retail price.) How’s that for irrational exuberance?
And bought my youngest son a game he’s been wanting for quite a while – and a bottle of Skinny Girl Cosmos to celebrate. Because it’s good to be rich and thin. Except that working too much makes me fat since I don’t have as much time to exercise. On a happy note, work is restructuring for sure – yay! That means I’ll get let go! (Or make them let me go.)
9/14 – 8:03 a.m. – Holy **** look at that market go. Up up and away! Yikes, I set my sell prices too low last weekend! Retreat, retreat!
9/13 – whew, another 2% up day… Up to $20k+ gains for the month, 24% YTD XIRR and 6.4% for the month. A sale of PWT at $15.50 was triggered today so there’s some cash replenished (about $15k). The Niko I bought yesterday is up about 10% today (since I was catching a falling knife, I’m only up 8%). I’m tempted to dump it to be honest. Will maybe try and get a couple of more bucks out of it.
Enough rah rah of what I (possibly / maybe) did right. What did I do wrong? The PMG I bought on the free-fall still dropped a bit after, so I bought too quick. So I bought some more today. I didn’t buy enough of either of them because I felt a little nervous about the Niko. This is the same thing that happened when AuRico Gold fell 22% one day a couple of weeks ago. I was nervous so didn’t buy – and it went up of course. Oh well, I think I was in a lot of meetings that day and couldn’t have bought anyway. This being at work thing is costing me money.
Sigh… I seem to trade a lot more than I thought I would. I’m not sure how I would have done had I bought heavily in June and just held until now. Taking a WAG based on my gains (eg. Baytex is the high at 19.61%), I think it would be somewhere around 16% average in those 3 months vs. the 22% gain I see in those 3 months in my RRSP with the trading. So it does seem worth it to do. It just feels like it contradicts what I think value investing should be about – buy at a discount and sell when they reach full value.
My son’s PBN is up 12%. I put a sell order in for 225 shares. $1200 in 2 weeks – he’s happy. I just want to see some cash in that account (and mine).
9/12 – picked up 2 free-falls – now *this* is what cash is for…
PMG was down over 14% today and Niko down 33% – it’s the old exploration story of drilling and coming up dry. I waited for the dust to settle and bought into both, increasing my position in PMG and adding Niko. Niko at 14 or 15? No. But at 9? Not too shabby. Analysts are rating them at 1.5-2 times the price so I (really) hope they’re right since that’s about what I came up with for fair value.
Work is becoming increasingly annoying. I’m trying so hard to focus on the positives. But it’s not easy. You know what makes it harder? Seeing that my stock returns completely cover my expenses and then some – even by a lot. But that’s this year. What if I can’t pull this off again? What if I’m only lucky? It does not make it easier to put up with bullshit when you (think you) can afford to walk away. It makes it harder – when you think too much about worst case scenarios. You know you have a choice – so if you’re there, you’re *choosing* to be there. These other poor suckers are stuck for the paycheque.
Maybe this is the dreaded “one more year” phenomenon. Only mine is “6 months or I’ll blow my head off – or someone else’s” Probably someone else’s since I’m kind of attached to my own head – literally and figuratively.
9/11 – Up to 20.5% YTD XIRR and 4.5% for the month so… sold about $10k of the $25k Teck Mining that I have/had at $30.53 – it was up to $30.77 at the end of the day but I had work to do and had to plan my escape quickly at lunchtime and put in a limit order. Made somewhere around 12% on that. I did a quick bit of research on stocktwits for the buzz on Teck before I sold. Ayayay that place is contradictory – some are shorting it, some are long. I guess I’m both since I sold some and held some. Just wanted the cash in reserve really.
The son is up 10.8% on the Petrobakken in his TFSA not counting the ~.5% monthly dividend he made the date for. I hate to say this, but I might pull him out and wait for October sell-off to buy back in and hold until January. I don’t like seeing him undiversified at all either but he doesn’t really have enough money to be reasonably diversified. Maybe I’ll sell half.
I have 3 losers: Transalta, Encana and RIMM. Rimm I don’t really count because I only bought ~ $2,000 worth for a lark and am only down a few hundred. (That was kind of silly of me but I still think it will hit $10+ again some time in the next year.) I was thisclose to buying more Encana when it was around $17.50 but didn’t – boo since it’s at $22ish now. I still think the upside will come to at least break even this winter on that one. And then there’s my “bad doggie” TA.
What I think happens when we don’t want to sell our losers is that we would rather be right than rich (or at least better off). It’s like that old saying “would you rather be right or loved?” So we fight with our loved ones, make them wrong and push them away because of our irrational desire to be omniscient or something. I learned the hard way not to do that with my children.
We don’t think logically. ie. (a) we forget the opportunity costs if we could deploy that money somewhere where we could make a better return than going up from a loss and (b) we don’t really understand the company and what it’s facing for whatever reason and (c) if we sell at a loss, we have to admit that we were wrong. I’m cool with being wrong and am learning what and what not to do – the hard way, with real money.
Fortunately in the case of this particular dog, I do know the company very well. I know the CEO and don’t believe that she’s the person to turn things around. She’s like the empress with no clothes and hubris is not a good thing. And… I need the capital losses since I’ve never had any (in a given year) so don’t have any to carry-forward. My plan is to wait to see if there’s an oil dip and if there is, I’ll dump it and buy something else to flip. Or hold. Really, I don’t mind holding.
Note to self – if you own a stock and it goes down, if you’re not saying woohoo and wanting to buy more at this awesome bargain price, you should probably dump it.
9/9 – Valuation site based on Walter & Edwin Schloss – LOVE their value investing resources page.
Schloss on: Factors needed to make money in the stock market.
And a video: The best of value investing – I remember seeing that interview with Whitman at about 38 minutes back in late 2008
Some notes on Margin of Safety.
And a page full of Klarman articles.
9/8 – Valuation and The guilt of trading too much.
Behavioral biases lead many of us to trade at the wrong times. It can be comforting, for example, to buy when stocks are rising and nearly irresistible to sell when they are plummeting, as they did last week. This means buying high and selling low, a fine recipe for financial misery.
Apparently I haven’t got the memo that that’s what people do – this buy when rising and sell when dropping thing. Do other people really do that? No focus on valuation? I have to stop myself from binging on deals and selling when gains come so quickly they spook me.
If you do want to learn about valuation, the best place to learn more is with Aswath Damodaran – he has an online class that just started. He also has a variety of books available on Amazon. To start, I would recommend The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit.
I’m going to reorganize my watch-lists today. I have 2 watch-lists for “currently own” and 2 for “want to own”. But I’m going to re-organize the “want to owns” for “stuff that I want that is too expensive to buy right now but will hopefully come down” and “stuff that I want that is getting close to my price”.
One of the places that I source companies to research is Alberta Venture. “Buy local” and all that. Plus you can go to the AGM’s and hang out with the suits if you feel so inclined.
9/7 – “Thank you China” day
The additional Teck I bought a week or so ago with some of the last of my cash-out from prior sales was up over 9% today. My son’s TFSA is up 8.91% so he’s happy – I asked him to not be mad at me for “spending” all of his money and not giving him any to play with, but he said that he trusts me implicitly to do what’s right for him. Happy happy joy joy – just one small happy family.
Now the rubber meets the road again with an XIRR of 19.7% and gain for the month to date (yeah 4 days – whatever) of 3.9% for a balance of $341k. I said previously that I would sell something to free up some cash when/if I got up that high again, but I want to not buy and hold but stay and monitor since nothing’s at full value. I still want to sell some PWT (at maybe $16 or so – now at $14.72) because it’s over-weighted but other than that, I think I’ll let ‘er ride. I tell you, I almost have to sit on my hands to do this but my gut (which is probably wrong) tells me we’re in for a good ride for a little bit here. Maybe I just don’t have indigestion. (Update 9/8: I thought about this some more and I think it’s best to play safe and not delude myself with thinking in any way that I have a crystal ball since I surely don’t. I never regret having a good stash of cash – ever. It’s what I have to do to sleep well at night and actually be happy when I see a downturn – so I can be happy when things go up and happy when they go down. I would rather be happy than have a couple % more $. Sell orders have been placed.)
9/6 – Sometimes I do this spreadsheet scenario…
…wherein I work like a normal person until I’m like 60 years old and save about $100k/year. At the end, I’m worth about $3-4M. Then I hit undo and erase the nightmare. Mostly because I don’t know what I’d even do to spend $120k or so a year. But I can see spending maybe half that – even though I never have. I think after a trip a year to Europe and maybe another big trip somewhere, I’d have to give the rest away because I’d have no use for it. Seems rather pointless. Undo undo!
I made $12k or so today – yay Super Mario (the European Draghi kind). I didn’t see him coming! And I can’t swim under water for a very long time.
9/6 - Yay! Am at $18,337 divvies! In total have about $150k in non or very low yielding stocks as well that could in theory be sold to buy dividend payers. That’s maybe another $7500/year. So just another $100k to go.
Oh, who am I kidding? I’ll want to work a bit here and there for a few more years, just more project work that’s flexible/part-time and gives me summers off. Push comes to shove, there’s always corporate tax.
9/4 – extended my work contract to Dec 31. Please release me, let me go…
Everything was down so I threw another $10k into the account (the signals are yelling right now), and bought some COS. SNC-Lavelin hit a 52 week low so am looking at that one – oh, except I have no cash left. If things go down more, I’m leveraging this time. No risk, no reward and all that. I think I might be up to $18k/year in divvies now. I’m going to renew my mortgage when it comes due this month, drop my payments down and maybe take out a HELOC. Mortgages are really cheap money and I’m pretty meh about being debt free if I know I can turn around and pay the sucker off with a year of work or selling some stock. Most of the time it’s best to make financial decisions based on logic and not emotion and I am a bit of a cold fish (or so my exes have told me).
9/3 – article on allocations: Cash holding funds may limit losses in downturns
I did the XIRR calculation of returns on the LIRA, TFSA and RRSP. They were all transferred from mutual funds into self-directed plans between June 19-21 when I finally got off my ass and transferred everything over to DIY accounts. So far, they are at returns of LIRA: 65.8%, TFSA: 36.2% and RRSP: 58.1% over those 2.5 months despite the big drop last week. I expect those numbers to go down – a lot – like by 65% or more as the year wears on.
I’m not sure what that tells me other than that 2.5 months is a REALLY short period of time and quite meaningless, buying low is a really good thing to do - the signals in June were obvious, but they won’t always be – and that I would have been smart to be in 100% cash in February and just waited until June to throw it all back in. So I suppose I should be grateful that I didn’t pull out of my mutuals until June. And that I shouldn’t have been in bonds for a short period in the TFSA (or not at the time that I was). But it doesn’t really tell me what to do from a forward thinking perspective. I want to set up a mechanical algorithmic method like in the article above, but am not sure what that would be. Something like for every 1% gain in a monthly period, move 10% to cash and for every 1% loss, move 10% out of cash back into the market? But what kind of idiot trades their dividend stocks – since hello? You can’t get the dividends if you sell them.
9/2 – great series’ on Canadian REIT’s and higher yield investing written by Monty Spivak over at SA – there’s been a real surge of posters on Seeking Alpha lately covering CAD dividend stocks, especially now that Americans can invest in them in their tax deferred accounts and not have to fiddle with claiming taxes back. Makes you wonder how or if that’s impacting prices.
9/1 – Here’s an example of a buy and hold portfolio where that method has worked with granny stocks – with some good, but apparently coincidental timing:
By my calculations, that portfolio is overvalued if you were to invest in it today. Basically take the current yield and dividend growth rate and figure out how many years it takes to yield 10%. Generally, less than 10 years is good, more than 10 indicates an overvalued stock.
Are stocks really that “safe” if they’re overvalued? I just don’t see it?
August synopsis – timing may not be everything, but it’s a lot
I broke my rules for buying, selling and
hoarding holding cash. Will try very hard not to do that again. I got caught up in dividend-chasing with those Aug 29 ex-div dates and it cost me. Well, I don’t really have any firm rules for selling so maybe I should make some since going by gut feel obviously doesn’t work. I want to learn more about technical analysis – so much to learn, so little time…
Sidenote – This is the first time ever I’ve seen a perfectly round ,000 number come up on my ending balance. It feels like when you buy a bunch of stuff at the grocery store and your bill comes to exactly $100.00. Stranger still that it happened on a month-end.
8/31 – TGIF – fortunate Friday phenomenon deja vu – Erich Fromm quote edition
Also accompanied this time by TGIBT – Thank god I bought Thursday.
If I am what I have and if I lose what I have who then am I?
The task we must set for ourselves is not to feel secure, but to be able to tolerate insecurity.
Although my son did get a bit upset that I put his money into Petrobakken, it’s up 4% so far today. He wants to put some into some gaming companies but I can’t recall the names. He’ll just have to save more if he wants to buy games. He thinks we’re going to become cyborgs in 20 years…
The danger of the past was that men became slaves. The danger of the future is that man may become robots.
Here’s a link to McDep’s Independent Energy Evaluation. I’m a little confused as to why he was projecting $20 natgas a few years ago though – that’s a bit of a very wrong call.
Here’s a decent article on Colombian energy stocks (why do these things always come out about 2 months too late when the best buying opportunities are gone?):
In other news, I passed through Jackson, Wyoming myself last year on our RV trip while playing the dice game. Nice place, small mountains, OK fishing but I have problems with doing fly fishing movements correctly. Also was contacted by some guy from a magazine to do an interview on kids living at home to save money. I feel bad that I said I’d call him but got busy with work and forgot about him. I don’t want the blog traffic so I feel good about not doing the interview, just feel bad that I said I’d help him and didn’t. I just don’t see what the upside is for me or anyone else.
The mother-child relationship is paradoxical and, in a sense, tragic. It requires the most intense love on the mother’s side, yet this very love must help the child grow away from the mother, and to become fully independent.
I was approached by a bizarre graphologist in the park yesterday who told me that my handwriting indicated that (a) I don’t talk to my mother anymore (I suppose since she’s been dead for more than 20 years that would make sense) and (b) I’m artistic and shouldn’t be doing so much accounting work. Initially, I was worried he was trying to pick me up so made up an imaginary husband but I think he was just after a consulting fee. Heheh, there are some benefits to getting older and not getting hit on all the time – although I suppose I could be disappointed that he was after my cash and not my body. Maybe I’ll have to encounter a phrenologist for that.
What most people in our culture mean by being lovable is essentially a mixture between being popular and having sex appeal.
When you’re hot, you’re hot and when you’re not, you’re not. Sort of like my returns this month.
Have got the day off, so will re-read some Erich Fromm on freedom.
8/30 – OMG slaughterhouse week
OK, work with me here. Here’s the bright side – I wasn’t a total moron and took some money off the table earlier this month. No it wasn’t enough, but I’m learning. It’s more important to learn than to get everything right immediately right off the bat. I bought some stuff cheap today so that was nice. But am down to 11.8% YTD – waah.
I think that maybe 10% (minimum) is a good amount to keep in cash. I bought too quick and not at really great prices in my accounts earlier this week. I *knew* that – but I should know better. You have to hold out for the right ones at the right price – yikes that sounds sort of like dating… well except about the price thing. I hope.
My son gave his seal of approval to the book that I bought him – “Cracking the Code” – according to him “it’s like Forbes had sex with Scientific American.” Alrighty then.
8/29 – biggest free-fall I’ve ever seen on a stock – Niko Resources
Down to $15-ish from over $100 a couple of years ago and $50+ just a few short months ago. The haters be hating on that one. (Note – I really hate that term “haters” – an immature phrase usually reserved for anyone who doesn’t agree with you and might have some really valid points as to why you’re doing something stupid and a little risky. Here’s a newsflash – if you can’t take constructive feedback and evaluate it rationally without calling people haters – and then be independent enough to make up your own mind and take the consequences like an adult, you’re too immature to be making decisions on your own. Because most people don’t criticize people who they respect and trust to make good decisions. The internet however, can be different because some people come out with really stupid shit without knowing you at all – I should know, I do it myself and really hate that I do that.)
Anyway, back to Niko. I don’t know about this one, I get a sick feeling at the thought of putting money into it. It feels sort of speculative even though I think there can be significant upside. Fortunately, I have a 4 day weekend and lots of time to do some research beyond the little bit that I’ve done so far. The CEO was at one time the highest paid CEO in Canada – maybe it’s crazy expectations but for 8 million or so in pay a year, I expect some good EPS numbers or at least on the positive side.
I bought my son 725 shares of Petrobakken at $12.75 in his TFSA. Hopefully the dividends will pay for his car insurance over the next year or so. That’s what I want to teach him – that if he doesn’t touch the principal, money invested will make him free money. What a great lesson to learn when you’re in your early 20′s. And maybe he’ll be like his mom some day and have more fun shopping in the stock market than he’s ever had in a mall.
8/28 – mistake noted – take more off the table than you think you should because 24% is really damn good
What I should have done back when I was at a 24% IRR – sell more than I did or wanted to. I think perhaps it’s not a good idea to listen to these “buy and hold” prognosticators. Back down to a 16.6% IRR and just over $11k gains for the month (I know – nothing to complain about, but I will anyway because I was stupid.) Bought some Petrobakken and Petrobank in the RRSP. Going to see if things go down more this week and if they do, I’ll be slapping down money and buying in the RRSP toot sweet. These aren’t your grandma’s stocks of the 1990′s where everything goes up just because you’re still breathing – they’re volatile and you can pump a bit extra out of them with playing the highs and lows.
Have been reading a bit more about the “January effect“. It was definitely true for my portfolio this year, but did I take advantage of it? Noooo… I was still under the spell of the buy and holders at the time. I saw a graph that I can’t find again that indicated that the low was around week 42-43 and the high around week 1-2.
Here’s a good screen to run:
stock price > 1 1/2 (eliminates potential delisting candidates)
market cap < $100 M
institutional ownership < 40%
additional absolute criteria to eliminate stocks with the worst fundamentals:
price/book < 4
price/cashflow > 0 (identifies stocks with pos. cashflow)
I also read something somewhere about volatility and how it signals a forthcoming bear market / crash. It’s something to keep in mind. I wouldn’t watch my stocks for that since I’m invested in volatile stocks, but it is good to keep in mind for watching the S&P – and I track SPY on my phone app. So far not volatile at all – whew.
8/27 – some US stocks to look at:
8/27 – put in buy order ~$10k of Petrobakken in RRSP – at (gasp!) market price
Rats, I was late on this one – it got an analyst upgrade on Friday that I just read about this a.m. Ex-div date of Aug 29 and 7.1% yield (paid monthly) – total dividends over $17.3k/year now – happy birthday to me! Those incremental increases of $60-$80/month add up over time. Woot – there’s the electricity bill covered!
I was reading Tweedy Browne’s site yesterday and their returns are really quite poor (but better than S&P indexing) considering they’re professionals – and value investors.
My son’s TFSA money came through at just over $9k and I have to think about how to spend that one more than my own money. The rest is going to school costs but I want to maximize his returns for next year’s school cost – so I’m not thinking long term here like I try to do for myself.
8/26 – Financial Post shorts – $37M shorting PWT?!? Up from $32M July 31
Interesting, since they’re discussed as a potential take-over candidate as well. There’s something about short figures that don’t make sense to me – gold stocks were increasingly being shorted in July when it was a great time to be buying. And people were still shorting Nexen after the deal was made. Weird. I’m going to start tracking this for everything I own / want to buy – it might be a buy/sell indicator (in the opposite direction…)
8/26 – The Rediscovered Benjamin Graham – such a great read
8/25 – good read: 10 ways to beat an index – Tweedy Browne
I spent almost an entire day yesterday reading every post that Michael Burry and James Clarke wrote on Silicon Investor because they’re like a primer on how to do deep value investing. I copied the best of them into a file which I’ll print off at work and summarize. It’s interesting to read those old posts from 2000-1 particularly w.r.t. their bearishness on Amazon (Burry particularly, thinking it wasn’t going to go anywhere) – but Clarke ended up reading and applying advice from the book “The Quest for Value” – owning Apple at that time at $17 and Amazon at around $25 I think. It looks like they both bought Berkshire at around $1100 – it’s now trading at $128,224.90. Imagine that. Just 10 shares and you could retire. Here’s what Clarke said about Apple:
And then we have Apple, which somebody asked about. Here is one where a very simple cash based analysis comes together beautifully. $17 stock price, $11 of cash. So you’re paying $6 for the business. It generated approximately $2 a share of free cash flow each of the last three years. Obviously they hit a rough spot, and I have no idea how long that will last. But the stock is just too cheap. I just think we have a case here where the people who bought the stock at 60 had no comprehension of valuation, and now they’re selling at this level having lost a lot of money and demonstrating that they learned absolutely nothing from the experience.
Clarke had just started working at a value-focused pension fund at the time. He provided some good insight as to why mutual funds suck so much in down markets.
Or maybe this is just the frustrating (to us bears) 10% correction we have seen before. That would make this the bottom. But I don’t think so, because the fundamentals (except for interest rates) have deteriorated since those past corrections and the valuations may be even higher. If the market bounces from here to new highs, I may just consider selling everything and joining the priesthood. I guess if I’m married I can’t do that, so I’ll just have to come back and fight another day.
No offense taken – I completely agree with you from the inside (and I am talking about pension fund management, not mutual funds), but let me fill in the blanks as to how this insular world of institutional investing works. How the world really works it this. My firm’s and just about every investment firm’s clients will not let us hold more than 5% cash. If you do that and are wrong for one quarter, you lose half your clients. So its not an option. From my experience, I would guess that over half of value managers are very much in cash right now in their personal accounts. BUT THEY ARE NOT ALLOWED TO DO THAT PROFESSIONALLY. They want to, but can’t. These same clients are going to be screaming next quarter – WHY DIDN’T YOU WARN US?!? This business is idiotic. If I could have managed our firm’s accounts as I have managed my personal account our clients would be much happier right about now. But even if I could have I never would have because the clients, or rather their consultants (who really run this business on the institutional side) demand “market performance” – which means if you lose your clients’ money, thats fine, as long as everybody else does too. At the bottom of a bear market, I’m sure these same consultants will be castigating us for being fully invested. This is another secret to Buffett’s success – he has found a group of “clients” (investors in BRK) who will let him do what he does best without trying to second guess him every quarter. That is a rare luxury, and a valuable one – not just to him, but to his shareholders.
What do you think happens when you are an institutional investor who owns 5% of an illiquid company trading at half what it is worth? If a lot of your other investments look like that too (we know the feeling on this thread) you lose clients, you have to sell that stock whether you want to or not. And you can’t pick your price – you HAVE to sell. And that drives the price down further, but you can’t buy more. This is a vicious cycle that may explain why something like New Holland keeps falling no matter what it is worth. That is the game most value managers are in right about now. And it is gutwrenching.
These consultants proclaim to hire us to invest, but do not seem to know what the word means. That is why value managers like me do much better in their personal accounts – its not that we are screwing our clients – we would love to do the same for our clients, but it is nearly impossible. I hope this helps to clear up what is a secretive business, but one which has a lot to do with the day to day prices of your investments. (Mutual funds are a different game, but just as much a game. I’m talking about pension fund investing which I know.)
Now you know why I won’t disclose who I work for.
OK, so it was not mutual fund shareholders selling, it was fund managers. But that’s the same thing. You’re a mutual fund manager with a 2% cash position who all of a sudden gets 4% of his shares redeemed in a day. He’s got to sell. He can’t choose when or whether – the only question is WHAT to sell. And when all the institutional buyers know what situation he’s in…well, you just saw it.
The market will probably bounce tomorrow pretty big at the open (if it doesn’t, then put on your crash helmet), but I will be selling anything I still own that is not nailed to the ground (i.e. does not have big tax consequences) if they participate in that rally. This bounce will fail because the psychology has changed 180 degrees and the big names still have 20 or 30% to fall before value conscious investors will rescue them.
There was a lighter side today. A joke was going around the Street that this is the Monica market, because it…goes down. Apologies to all, but I just wanted to let you know what institutional investors are spending their time on.
8/24 – Picked up Petrominerales (PMG) yesterday at $9.45 – 1000 shares
Surprisingly, it started taking off pretty early in the day – watching rapidly accelerating streaming stock prices is really fascinating. I think someone burped in Europe or something – sort of like the butterfly effect. I’ve come to the conclusion that I should do “fortunate Friday phenomenon” trading. Seriously, everything goes up every Friday – not sure what’s up with that. Just pull everything out Monday morning and throw it all back in on Thursday afternoon and you’re gold (yes, I’m still bitter about gold). PMG was up as high as $10.25 – the P/E ratio is still a very low 5.9 but there was some non-normalized earnings there too last year.
Here’s a great article on safe withdrawal rates: http://www.kitces.com/blog/archives/387-What-Returns-Are-Safe-Withdrawal-Rates-REALLY-Based-Upon.html
There’s a lot of fearful type people on the E-R forum who aim for something like a 2% withdrawal rate. I’m just aiming to live off dividends and save whatever gains come along. Well, unless there’s too much of them in which case I’ll blow it all traveling in Europe, get a facelift or something similar.
So I pulled out $12k cash that was just sitting there from selling something or other today to put into my RRSP. That brought my balance down to $313k but I think my IRR will be more accurate this way. With the withdrawal, I’m at 19.33% – the S&P is at 13.82% YTD so I think that’s not too bad? My tax-deferred accounts are doing better I think (haven’t figured it out though) because I usually initially buy in my taxable account and if the price dips, I go deeper with my non-taxable accounts – hence how I ended up owning over $100k of PWT (since sold about $20k worth and still have about $90k) – need to lighten up further on that one but am waiting for another dollar or two out of it.
Work sucked today. We have too many deadlines and deliverables. And people don’t understand the meaning of the term “materiality”. ie. when you’re talking about multi-billion dollar projects, variances of $1M DON’T F***ING MATTER! And what kind of freak company does budget ALL SUMMER LONG?!? ON EXCEL SPREADSHEETS?!? Sadly, I’ll be gone before the ERP comes along. Even living off of a 2% SWR would be worth it.
So here’s a career tip – never work for anyone who doesn’t have kids or any other kind of life outside of work.
It’s my birthday on Monday. I’ll be 47 – too old for this shit. And when I get stressed, I’m an early waker – 2 days in a row of pre-4 a.m. waking. I’m cranky – even the fortunate Friday phenomenon didn’t help. I’m going for Palm Bay / liquid happiness in a can… I’ll make my own wine if I have to cut the SWR.
8/23 – wonderful book: Gary Smith “How I Trade For a Living”
Found online in pdf form, it’s worth a google. I totally wouldn’t want to do what he does for a living but it sounds like he was very good at it. His goal was to never have a losing month. Mine is to increase my dividends so that I don’t have to do what he does and don’t have to worry about losing money in a given month or other short time period.
To that end, I got paid yesterday – paid off the Visa @ $338 and bought another 500 shares of Bonavista in the RRSP at $17.25 – monthly dividend at $.12 for an 8.3% yield =$60/month. Still regretting not buying that gold stock back in July, it looks like another up day ahead for it again.
8/22 – good read: No recession now, but when?
Cash is good to have when you see a cliff – just sayin’. Been there, done that, got to buy a whole lot of t-shirts dirt cheap in the last one.
8/21 – Petrominerales? Barrick Gold?
My aspie coworker writes emails to me at lunch time on his analysis of those PC stocks – also sends graphs and a whole bunch of other stuff. They read sort of like a dissertation… Anyhoo, a couple of the Canadian PC stocks I’ve had on my radar that are also on the PC list are Barrick Gold and Petrominerales. The premise behind PC is supposed to be rising EPS. I don’t think there’s much fundamental analysis there, more like focusing on under-valued stocks with rising EPS – which I agree with in this case, they’re both way low. PMG has a 5.59% dividend yield but has only paid a dividend since 2010. And… they’re drilling in Colombia…. Barrick has an increasing dividend pretty much over the last 5 years, but it’s not very high. I’ll see how things go and maybe nibble tomorrow.
I went over $21k gain for the month today with 6.8% monthly return. Total cash of $43k in the accounts. And I guess I get paid tomorrow too which will bring up the out of the accounts cash balance to $15k. I feel like such a weirdo hoping things will go down.
I guess I haven’t talked that much about the due diligence that I do before I decide to invest into a company. Here’s a basic list of steps that I go through (sometimes do much less for investments <$5,000):
- take a quick look at the financial statements – things I look for – rising EPS, sustainability of dividend (are they raising money or borrowing to pay the dividend or is it coming from earnings?) – pay a lot of attention to debt levels, earnings and cash flows – are they cash positive? Is there anything weird there year over year or quarter over quarter? (eg. are they not paying A/P? Not reducing LTD? Why the hell not?) What’s the F/S disclosure like – most of the important bad stuff should be in the notes under contingent liabilities. Is their P/E in a normal range for their industry?
- read the annual report and MD&A for at minimum the last year-end
- check out stockchase.com for discussion
- check out seekingalpha.com and read most of the articles on that stock
- google the hell out of them and read everything at least 10 pages down
- find out if anybody I know works there or if they know anybody that works there and what their opinion of the company is
I always ALWAYS check out the financial statements – even if I was investing $500 I would do that. If you can’t be bothered to do some homework, you should invest in index funds – period. (Doesn’t mean you can’t time index funds – heck, I’d try.)
8/21 – sold 700 shares of PWT @ $15.11
“History doesn’t repeat, but it sometimes rhymes.” – Mark Twain (I think) – last time we had this European short-termed exuberance in July, I did nothing. This time I took a little off the table since I’m still overloaded with PWT. I hit $.01 below the day’s high of $15.12. Even after that I’m still at $85k of the stuff in total, so still overweight. Doing the calc in my head, I think the XIRR is somewhere around 25% this year – my BA would laugh, apparently I don’t have a “beautiful mind” like she teases me about – worked out to 24.05%. I suspect she thinks I’m schizophrenic and wasn’t referring to my math skillz.
8/21 – calculated a proper portfolio return using XIRR
I think I’ll write a post on it in case it’s useful to someone else. I used to do this stuff at work all the time when calculating returns on asset or business purchases. I had forgotten the details of a few of my cash infusions and withdrawals. Last year I pulled out my dividends and put them back in when I bought something to make my income /expense calculator correct with my banking software but stopped doing that in January – so it was a good exercise to do.
8/20 – Finally got Petrobank!
300 shares in non-taxable account at
$12.88 oops (had a limit on that one that I set at lunch time) – $12.86 & closed at $12.95. Yay – $27 gain. No dividends on those – that comes with Petrobakken – which I’m going to wait to buy when it’s down – have left some cash in the TFSA especially for that one. Nice, gentle + / – 2% for everything today so things stayed nice and flattish. Well, sort of – closed at $329,539, so somehow made $1500 today – thanks PWT, CNQ and COS. Interesting, since the S&P/TSX was down 0.5% today. Abnormal returns I guess? Bankers Petroleum is like a little yo-yo these days. I’m going to have a closer look at it. It’s at $3.10 and should be trading somewhere between $4-5.
8/19 – Fear of Heights – II
I thought about this some more and think that I’m excessively cautious sometimes. I bought these stocks because they were dirt cheap and had a huge margin of safety and high potential / obvious upside so yeah, I should expect to see abnormally high returns and they’re still undervalued. I’m just being silly.
8/19 – Fear of Heights
I calculated the annualized gain so far to be 16.1% (TR). That makes me nervous since this month alone is 5.6%. I’ve got my trading spreadsheet set up for 16% gains this year now – 6% from dividends, 10% capital gains. At the beginning of the year, I set it for 10% and then changed to 12% and thought that was pretty optimistic/naive. I think this fear of heights is maybe not a good thing. How will I know where the peak is before it starts going back down? And why do I bother to keep trying to predict the future?
Now following David Fry’s articles on SA – he seems to provide a good summary of what’s going on.
Weekend reading is Peter Schiff’s Crash Proof 2.0: How to Profit from the Economic Collapse. Also South of 49 and Fire Sale: How to buy US foreclosures now. Being slightly misanthropic (at least when it comes to neighbours being in my face), I’m not looking for a house, I’m looking for land.
8/18 – Sitting at $328,048 – Baytex is the big winner so far at an 18% gain since I picked up about $40k of it in June at $40.02 (now at $47.32) – not counting dividends of ~6.6% YOC (whee! – $220 monthly!) – mostly in the RRSP thank god. My real estate friend & I were discussing what to do with “October sell-off” (there’s *sometimes* a sharp (and I mean sharp) temporary dip in late fall in O&G). Last year it was a little early – and I was a little oblivious and totally missed it. What this means is that I can’t be shy about pulling back on some gainers to store cash to prepare for buying on the drop – and to not re-buy too soon. A couple of months ago, I was thinking of just holding during that period but will have to wing this one and think of how I can have my cake and eat it too.
My little son isn’t happy with the stock that I bought him in my LIRA (this is part of his car money for when he’s 20) despite the fact that it’s gained (I put in $1000 and he put in $350). He has his little stock app set up on his little ipod so he can watch it, but he said that if it doesn’t have dividends, then it’s not a good stock. “But it’s gained $100 so that’s good!” I said – and tried to explain about growth stocks. He wasn’t impressed. “It’s not a gain unless you sell and get the money” he said – true that. Ungrateful brat.
8/17 – up about $3,000 today. That would be so exciting to have a $20k gain in a month. I should sell some more O&G to re-balance but need some very stable dividend stock to put it into first (then it’s kind of like cash that way). Ayayayay – where’s some wood to knock on? Checking out seniors housing this weekend – to buy, not to live. Extendicare, Leisure World and Chartwell (courtesy of my real estate friend). Don’t look like they’re particularly cheap though at first glance. I do like a good deal. Seniors housing to live in is NOT a good deal – those places run something like $2500/month – yikes. Old people aren’t going away and the boomers make it into a sort of growth industry (I think?)
8/16 – balance at $324,951 today with $40k held in cash and $10k outside. Well, I don’t know what to change the goal to – $350? I guess I don’t really need one, but they’re kind of fun to have.
I’m quite angry with myself that I was too cheap to go for a few cents more per share when I tried to pick up Goldcorp back on July 12 for $33. It closed at $37.93 today. Easy peasy 15% that would have been in 5 weeks. It’s like fishing stories of the one that got away or something.
Finished some major re-analysis on Alaris today at lunch and picked up about $10k more. The health care focus they have helped make the decision too. Bought in the LIRA because of the dividend.
Thinking about negative correlation stocks to oil today – is it USD? Transport companies? Airlines? Cruise lines?
8/15 – Five Plus Investor over at Seeking Alpha put her sweat into making a great spreadsheet of Canadian high yield stocks in this post:
It would be really hard not to earn a yield over 6% with that list. Sometimes I have a hard time understanding why people focus so much on the 4% safe withdrawal rate when surely with dividends combined with some gains here and there, they could do far better? I guess they’re in a lot of bonds or index funds and despite experiencing little to no inflation, they factor that in? It seems the older you get, the more conservative you get. But to me, dividend stocks ARE conservative.
I ran a firecalc scenario on this portfolio (which I think with additional savings will be at ~$400-$450k next year or the year after) estimating 17 years with a withdrawal of $30k/year and I came out at a probability of 78.2% success with an average ending balance over $500k. That’s good enough for me since after the mortgage is paid off, I could easily get by on $20k or so a year and not even blink. Plus there’s the RRSP’s, TFSA and LIRA to make up the 21.8% difference. And the house (since I want to downsize…) Maybe even the moho… (totally doubtful) But my job is SO easy – the only downside is that I have to be there (and commute) from 6:30 to 6:00 5 days a week. I kind of think this is my last gig. I don’t care anymore about this corporate stuff – and that’s a death knell for the career. The people are great though and they love me – that will be hard to walk away from.
In other news, my city is going to be the site for the summer games in 2014 and there’s lots of volunteer positions. The investing will fulfill the left brain and volunteering the right,
8/13 – I expected a decimation in intra-day trading since so much stuff was down – but I guess there was enough offsets so that the ~4% PWE decline didn’t matter much. Just a wee bit more and I’ll think about picking it up again… It turns out I was only $1,800 down overall. It’s funny how a sea of red can make you think you’re lower than you are. Still at over 3.2% gain for the month at about $10k of gains. I thought it would be a good day to unload the COS in the taxable account (to move to non-taxable since the ex-div date is coming up in a couple of weeks) since it actually gained – but not quite enough to meet my price. $.05, $.05! My kingdom for $.05! OK, no more Shakespeare.
AuRico Gold was down 7+% today on bad earnings disclosure. It’s a stock with a great range but I haven’t done enough homework on it to know whether it has a good margin of safety (first rule is do not lose your capital – no matter what). Closed at $6.66 (eek – the number of the beast!) – Shakespeare and biblical references – what more do you want? – with a 52 week high of $14.
This is weird – just after I finished reading “You can be a stock market genius” where Joel Greenblatt talks about spin-offs and how they can be really great money makers – Pfizer announces some kind of animal health spinoff. Squirrel!
8/12 – In looking for a book for my son that combined biotech with investing (I’m hoping that his love of all things biology, singularity and nanotechnology will (a) save me time in researching this area that I don’t know much about and (b) get him interested in investing), I came across Cracking the Code by Jim Mellon and Al Chalabi. Their newsletter is both historically accurate and predictive – and funny – here’s a link:
I wish I’d read one of their books (like Wake Up! – written in 2005 and warning of the housing and investment banking issues) or read their newsletter years ago but tended to stay away from the doom and gloomers when it seemed like most of the time their predictions didn’t turn out – or did they just call it too early? Kind of makes you think about inflation hedges like gold. I think this is why Burry advocated arable farm land with water sources and putting money into Canadian banks in his Vanderbilt talk.
Another book that I’m reading today is Joel Greenblatt’s “You Can Be a Stock Market Genius” – yeah, the title is super corny, but the book is great. I’ve read somewhere that the guys from Cornwall Capital (turned $110k into a million in a year or some other crazy time period prior to doing the sub-prime mortgage stuff) profiled in Michael Lewis’ The Big Short followed some methods that Greenblatt recommends (LEAPS I think) and JG was one of the first big investors in Burry’s hedge fund.
Meanwhile, I’m contemplating natgas stocks – I’m not sure that there will be another Chinese acquisition here in Canada of a bigger player – like these guys say. I don’t think the government will go for that many biggies back to back but… maybe they’ll wait and see how Progress and Nexen plays out. I’m part afraid to not dump some of my Encana now that it’s higher in a not-so-sustainable way and part afraid to keep it and watch it go back down. If it did get taken over, I’d feel like I got hit by lucky lightning twice – only this time I’d have to quit work or pay so much tax. I’ve been waiting for 3 years now to have a year of not working so I can cash in on the Canadian bank stocks I bought in 2009 too. It would be a dark comedy indeed if there was another crisis and my house of cards went down before I could do that.
8/12 – I was doing some filing + purging of financial documents yesterday and found my LIRA statement which I had transferred into a mutual fund in May 2010. Annualized return (in a “growth” fund) from May 2010 to June 2012 when I pulled it out was 2.59%. Shameful. My RRSP statement showed an annualized return from Mar 2005 to June 2012 of 1.59%. #^&*ing index + mutual funds. And %^&* people who say you shouldn’t invest on your own. And %^&* me for being too lazy and thinking I was just 100% lucky investing on my own. That self-doubt was expensive.
I always used to phone in to listen to quarterly conference calls with companies I’m invested in or interested in investing in – but I don’t absorb info as well through listening as I do in reading, plus it’s usually not convenient to do when you’re at work and a huge time suck – now I subscribe to updates on Seeking Alpha and read the transcripts as well as any analysis done by other people. After awhile you get a feel for whose updates to follow and whose to ignore.
8/11 – the hardest thing to know with investing is who to listen to so you know what to tune out. Obviously, sometimes you shouldn’t listen to yourself, especially in your irrationally exuberant moments – or when you’ve had a few too many. Recent gains – or drinks for that matter. Eddy at Crossing Wall Street thinks the S&P is fairly valued at a P/E of 12.2, I think the future is not so bright because I have a love affair with Klarman and Burry who both think that, but my 3rd place love Ken Fisher is somewhat bullish. But Burry also made something like 60% returns in the 2001 melt-down – but Fisher did pretty well too. I’ll stick with just being prepared either way.
And maybe it doesn’t matter sometimes what’s going to happen in the wider world in the future – it’s like predicting the weather. In farming the weather is always unpredictable so maybe you do what my dad did and weather (bad pun) the bad years better than the other guy – and then buy them out when they go bust. You don’t worry about what everyone else is doing or experiencing, you have to do life like improv on your own little stage.
My son’s TFSA money isn’t in his original bank and isn’t transferred either – it’s literally MIA. I wish I could phone up and pretend to be him. I’m going to get him to set up an RRSP account too. Ordinarily, I wouldn’t recommend that young, lower-earning people should do that but with his 3 jobs for most of this year, I think it’s not unreasonable. I’ll have to explain to him that he can’t look at his tax refund as available to spend – maybe let him have 10% of it. Actually since I pick up the mail and have his bank card, I could just subversively take control of it… but that doesn’t teach him anything and it’s more important to learn principles than to maximize savings. Plus I think he’ll have maxed out his TFSA contributions this year and I want him to keep up his 25% (on gross) savings rate. He doesn’t even notice the difference, just adjusts his spending accordingly to whatever he has left over. His little brother on the other hand knows to the penny how much he has in the bank (and won’t stop nagging me to buy him stocks). It’s funny how they’re so different – like they took after my bi-polar oblivious dreamer/practical sides and went to extremes with it.
8/10 – balance is at $324,710 with $35ish-k cash in non-taxable accounts in preparation for Armageddon. I think I have to revise the goal again with this 4.5% gain so far this month – see, when oil gets hot it moves fast. Cash is down b/c I nibbled at Legacy in the LIRA on a low bid that I wasn’t expecting to get. Picked it up at $6.75 – 200 shares (it was 4% down today). The Teck Resources I bought a week ago was up 10.64% today. Boy was I tempted to sell it for a quick $800 profit. I’m sure I’ll regret that I didn’t, but also kind of sure that I’d regret selling too. There was a little devil sitting on my shoulder telling me that if I just bought and sold a bit every week for an $800 or so profit, I could and should quit work tomorrow and do something really weird like “week trade”. Well, not tomorrow since it’s Saturday and we’re in the middle of budget season and I couldn’t let my team down… but still, she was whispering evil thoughts. Then there was all the sensible whispering of “ride your winners.” Sometimes I hate that sensible woman. Besides, I can work and week trade too – it’s a fun hobby to do at lunch time for 1/2 hour or so. Less if you’re more decisive than I am.
8/9 – sold the rest of the CNQ in the TFSA at $31 (only 200 shares) – yay, I made $600+ by 8:07 a.m. – can I go home? Still holding it in the taxable account but don’t want any capital gains in there until 2013. I mean I will if I *have* to, but would rather not. That one’s been really irrationally exuberant this week with some major volume – I’d do some homework on why but… oh update that they had a hit to NI in Q2 but are switching to oil from NG and cutting capex expenditures. This is enough to bump it over 10% in a week??? Sitting at $323k after today’s green market. Put in a stink bid for Petrobakken that didn’t get picked up. Hoping for a couple of down days so I can put this excess cash in the account in play ($37.3k in cash in total in the accounts not counting savings) and contribute to the RRSP’s – doing some homework on Petrobank as well. Also Legacy (no dividend so would like it in the taxable account). Zargon’s cutting their dividends in Q4 from $.10 to $.06 – shocking (not). Down from a 14.3% yield to ~8.5% which is a wise move – not going to happen until the October ex-div. I’m staying away, too much trouble trying to time that. Wellll, maybe a wittle bit…
8/8 – bought a bit of Bonavista in the RRSP with the cash already there from sales (200 shares @ ~ $17.27) for $3,454. It’s been valued at about $20 by the analysts, so no great upside – but dividends are at 8%. And yeah, almost everything was down a bit today. Easy come, easy go. Bye bye $319k or so – I hardly knew ya.
On the office floor, my Aspergers staff member is into the book Purple Chips – if I have to hear about how he’s tracking and valuing National Bank one more time, I’m going to scream. I don’t know about the average person with Aspergers, but holy smokes, that guy can focus on whatever I give him to do. I just point and he shoots. And shoots. And shoots. The day trader is doing dividend chasing (buying a day before the ex-dividend date and then dumping right after.) She doesn’t even know what the symbol is of what she buys, their name – or what they do as a business. She’s having discussions with her husband on the “pay down the mortgage vs. not” theme – I promised to find her backup for her argument to not pay it down (in this interest environment at least). Let’s be honest, it’s financially pretty silly to do. And I saw my real estate buddy’s watchlist of about 200 stocks on yahoo finance. He goes after the ones that are turning hot – sort of like momentum investing. It takes all kinds. But they make work a little more fun too. This is my problem – I don’t have these kinds of geeky people to hang out with outside of work and I don’t know where to find them. My boy-friends that work up north in the oil patch and walked their dogs with me in the dog park don’t come around anymore – or not when I do. And they’re not really geeky anyway. Sometimes they don’t know bpd production numbers at all – just “are we busy / hiring or not?” It’s a dilemma.
8/7 – sold just under 1/2 of the CNQ I bought in the TFSA last week or so on the stock’s 7%+ up day today - total of 9% profit or so on that one. WTH – starting to feel like a “week trader”. There’s another $5k cash that I freed up for future use/drops. Also sold some Pennwest in the LIRA at $14.30, bought in June at $12.90 for about $10k (10% gain – not counting the precious ~2% divvies received) – mostly because it was overweight at over $100k invested in it over all the accounts. Sitting on a total of about $30k cash in the accounts right now. In an ideal world, I’d like to have about $100k in cash going into the tax loss harvesting season of November and December. I think this one might be better than previous years’ because people dump their losers at bargain basement prices when the rest of their stuff is way up – and I don’t think most people realize how over-valued the market as a whole is right now (based on P/E – note to self put links in there b/c I’m not just talking out of my ass). It’s like going garage saling in a wealthy neighborhood.
In other news, I’m up to about $
317k, oops-$319k in intraday trading with a 10+% YTD gain. Got paid today – $6500, paid off my M/C for $1500 and moved $4k to high interest savings. I really need to find some “ick” stocks that I can hold for more than a week. I also didn’t find the golden key in the Caramilk bar for the $250,000 grand prize. And I gave 3 mid-year performance reviews today – hence the chocolate – and red wine – apres-work of course. Meanwhile, all I could think about was get out of my office, I want to see what the stock market is doing!! Is that wrong?
8/3 – the market bump today triggered my sell of SU in the RRSP at $31.50 – gain of around 11-12% on 500 shares so that was nice (still holding it in my taxable account). Will probably replace it with Bonavista (8.34% yield and a monthly dividend). But I think I’ll wait until next weeks probable-almost-certain dip to see if there’s better bargains. I’ve got some email alerts set up now.
8/3 – caught a falling knife for a little over $8k of mining company Teck Resources yesterday (it hit a new 52 week low of $26.97) with the money from the Nexen sale and July dividends. Of all the stocks I watch, only one went up yesterday – Husky – the one I sold 4 days ago. LOL So much for maintaining an 8% cash balance, but it’s a good company at a great price and should be back b/w $40-$50 by next year (I hope). Hopefully the market’s still down when I get paid next week so I can buy low for my RRSP. I lost $10k yesterday – that was painful. In other news, my coffee grinder died this morning – also painful.
7/31 – dividends are up to $16,847 annually vs. $16,082 at June 30. Received $2,534.50 in July but August will only be about $900. Aiming for $19k in earnings from dividends by the end of the year with the growth in them coming from investments into the RRSP (assuming I don’t sell anything which is fairly unlikely). I didn’t count the dividend I received from the bond fund ($150) in the TFSA since I sold it right after I received the divvy and right before they dropped the dividend. Moved that money to COS and CNQ – both big market cap, safe companies. Safety first! Plus I think bonds are not the place to be.
7/30 – sold Husky – woot! That *itch just wasn’t moving AT ALL. So I dumped her. It has a range of maybe 20-30% and it was sitting in the middle of it – which isn’t enough upside. My cash still hasn’t transferred – feel like I’m in total limbo – I want MY MONEY !!!
7/29 – spent a couple of hours yesterday doing up my allocation spreadsheet for rebalancing purposes. The difficult part is going to be tracking and moving everything into the right pots – taxable a/c, TFSA, LIRA and RRSP (the latter 2 are like a single entity). Almost everything is in the right spot but it just requires a bit of fiddling around. As long as it doesn’t require pivot tables or an access database it’s all good. I’m shooting for an 8% cash balance which I think is a reasonable amount to have – while I’m working – with the intent that if there was a big drop in the market, I’d throw it all in. Things I need to look for are small cap O&G, REIT’s, some more BDC’s and lower the Canroy’s.
Spending YTD is at $28,089 – yikes! 0.3% over plan!!! Call out the cavalry and cut the cable! (Actually have been meaning to cut the cable for about a year since we don’t watch it (laziness and procrastination doesn’t come cheap) – maybe buy some Shaw or Rogers stock with the savings…) I finally put a reminder into my daytimer and the bill in my purse. Baby steps…
7/28 – funds still haven’t transferred but that’s ok. I suspect this little surge we had is temporary and there will be better buying opportunities coming up. A friend highly recommended Painted Pony so I’ll take a look at that one. I’m thinking about selling the COS in my taxable account (up 9%+) and re-buying it in my RRSP. Also going to sell the SU (up 13%+) in my RRSP and re-buy it in my taxable. The re-buying will have to wait for a drop though. The reason for the move is partly to capture gains but more importantly, decrease dividends in my taxable account. I’ve already paid $31,950.41 in the first 1/2 of the year on my pay… ugh… I pay more in taxes than I spend. Yes, I know it’s irrational to think this way because I did “get to spend” double that, but… you can take the accountant out of the tax department…
7/26 – due diligence done (although it’s never done-done) and will be putting my RRSP money into Zargon O&G and maybe a bit into Bonavista Energy. Bonavista isn’t a huge “value stock” right now (like another one I’d love to have – Arc) and I suspect that Zargon’s dividend might be cut soon (14%+ is a bit much) but we’re not betting the farm here either. I wanted to buy it before the ex-dividend date but that’s tomorrow and for whatever reason, my cash isn’t in the account yet??? I think I’ll wait and see if it goes down a bit this month – or if they cut the dividend. I appear to have that effect on stocks.
7/25 – Transalta decimated with a double earnings and force majeure whammy but Suncor and Pennwest save my bacon for the day. Put $8,000 into my RRSP but not sure what to put it in. $13,000 down and $26-28,000 or so left to go (keep forgetting I have $3k or so in over-contributions left over from a couple of years ago that I’ve never claimed so have to figure this out).
Here’s a really good study: Rebalancing and the Value Effect
And my favorite hedge guru – Seth Klarman in an interview with Jason Zweig
7/24 – here’s a series that should be worth reading over at SA:
It’s a bit more exciting than the usual “buy J&J and Wal-Mart” DGI crowd.
7/23 – sold Nexen at $26.19 this morning – woot! – dudes been bought finally. Bought in May at $16.23 so a 60-ish% gain on that – PLUS!!! – actually got a single monstrous dividend payment of $12.50… Every little bit counts…
7/22 -from Reuters today: “With its heavy commodity exposure, the Canadian market has fallen off the pace set by Wall Street this year. The S&P 500 index has risen 8 percent, while the Toronto benchmark index has dropped 3 percent.” I’m up 4.3% YTD – and am more than happy with that.
2 of the RRSP stocks are back up to +8% gains in exactly 1 month. I’ll watch them more closely now in the interests of trimming them a bit. But need to take some time to do some research for what’s going to replace them. Here’s a few I’m watching: Peyto Exploration, Pembina, Zargon Energy, Precision Drilling, Petrobakken… But. Must. Diversify. Industries. And get my head out of the (oil)sands. Sigh… time to start doing screens and more reading.
Pengrowth cut their dividend a little while after I bought – the dirty rats. I figured that was going to happen since it was kinda unrealistically high (hence my babbling about being worried about dividend cuts right after I bought). The CFO said earlier in the year that they weren’t going to cut but it was the smart thing for them to do so I respect that. I wanted to buy some more when the price dropped post-cut but then thought about that diversifying thingy and didn’t.
One thing I’ve learned this buying season is that it’s best to be patient, keep cash and wait a little bit and see where things fall out. I think I could have got another 1-2% out of some of these had I done that. But that’s crystal ball / hindsight thinking too.
There’s a lady who does range trading in O&G that I’ve been reading on seeking alpha. That’s a good strategy to add to the toolbox for cyclical stocks.
7/15 – if you don’t want to spend about $1000 on amazon buying Seth Klarman’s “Margin of Safety” (probably the best investing book ever written), it’s – ahem – online in pdf form.
If/when I start following some index fund / asset allocation methods again in my non-taxable accounts, I’ll probably use a method like LOL’s market timing newsletter. It seems easy to do on a purely mechanical basis.
Bought my son a gorgeous solid wood TV stand at the auction for $80, 2 big paintings for me for $15 (for both!) that totally match another set I have and a couple of memory foam pillows for $15. The bed set-up that I bought last year at Costco for about $1000 (for just the bed) was at auction and sold for $700 for the bed plus dresser & mirror plus two nightstands. I’m so dumb. But not as dumb as the people at auction who were buying food items at more than retail prices. But maybe I’m dumber since you can buy a lot of over-priced food for the amount I feel like I over-spent. I think it’s like the stock market and people sometimes just want to buy crap even if it doesn’t make sense.
Another couple thou of dividends hit the account this week (I don’t DRIP anything). There’s just something about dividends that gives me the warm and fuzzies. Maybe because it feels like a paycheck – for doing nothing.
Here’s a happiness vs income study: http://www.people.hbs.edu/mnorton/aknin%20norton%20dunn%202009.pdf
7/14 – More election year reading: Presidential election cycle
Always an enjoyable read: Reminisces of a Stock Operator
Anyway, off to a furniture auction! Good times, good times…
7/12 – Put buy order in for Goldcorp in the LIRA @ $33 – didn’t get picked up
Presidential elections and stock market cycles – really? Hmm. Ties into my planned strategy of hopefully selling everything in January or February. I think?
Ken Fisher puts out the historical number of 18.8% return when a newly elected Republican gets in.
07/11 – holy slaughterhouse week. Hindsight wish – that I’d listened to myself back on 07/03, sold some out at a 12% gain on the temporary European euphoria and bought back in yesterday. Grr, I *knew* this was going to happen, just thought we had 1-2 more up days to come. Mistake noted for next time not to be too greedy and more pessimistic. On the bright side, my son’s TFSA money s/b transferred soon (?) and he should benefit from the decimation. Also bright side – my TFSA bonds are up 3.05 % – that and $5 could buy a trip to Vegas! (Except why go to Vegas when I can lose MORE money at home?)
07/09 – Book I read this weekend and recommend – Market Wizards: Interviews with Top Traders by Jack D. Schwager
Lessons learned from the book – conservative position sizing for risk management (1% of equity for many of them), importance of self-discipline (some of these guys were complete gamblers when they started), yet learn by doing (IMO doing it with real money that you hate to lose is good – even if it’s just a little bit – because you have skin in the game – otherwise it’s no different than a monopoly game) and to always be learning from your mistakes.
07/08 – this is so neat – I just found this benchmark graphing feature on my investing account site – here’s a download of my 2009 graph (I’m yellow, the S&P is red):
I knew I did well, but didn’t think I did that well comparatively. I wish it had my info back to 2008. I think the results were about the same for me but not quite so hot for the S&P (sold Suncor at about $60 in early summer and cashed out of all my stock in August/08 when I was laid off from work – and they were high). Unfortunately my RRSP’s were all in index / mutual funds in ’08 and ’09. I was just average in 2010-11 since I was just buy and hold without a lot of buy. (Actually not true, I sold both CVS and TA both at a 10% gain in October, 2011 and made the mistake of buying ECA which is still sitting at a loss right now.) Oh well – mistake noted. Onward and upward!
07/08 – figured out my sell prices yesterday. I’ve got a couple of stocks (HSE & TA) that don’t move much at all and I’m wondering whether to keep them or not. They both pay a very nice 5-6.5% dividend but I don’t want dividends for another 2 years because I’ll be taxed on them. Your investing strategy has to fit within your general financial goals and tax situation – both short and long term. And my financial goals are to not have any taxable gains or dividends until 2014-2015. Then when I want to establish a dividend stream of income that covers my expenses, the money and time (to pick entry points) is there to establish it. In other words, I’m following a strategy that’s not right for my current situation. It was a good strategy 6 months ago when I was only intending to work for a few months this year, but not now. Or I suck it up, pay even more taxes, switch to growth stocks and use the stock losses that I’m sure to experience in the next 3 years.
07/07 – fantastic article: Opportunistic rebalancing
Found at this fantastic thread: Questions on value averaging.
Also found out yesterday that my “so cool butter wouldn’t melt in her mouth” employee is a closet day trader.
07/04 – getting thisclose to selling a bit of stock in the RRSP & LIRA – they’re all up over 11-12% (plus an extra 2% for dividends on 2 of them), waiting for a 15% gain to give them a 10-25% haircut. Will run the numbers over the weekend and figure out the decumulation strategy since I think there’s still a lot of upside there. Bal. at $316,632 on this account. Perhaps the annual goal is too small. And perhaps I’m being precipitous. I just want to be prepared on the exit side.
07/03 – put in sell limit at $37.40 for 300 shares of Cenovus – will be a 25% gain at that price and holding on to the rest. Today was a sick gainer (up 3.5% overall).
July look-forward – saving more than expected this year and extended the work contract to Sept 30. So… am going to revise the target for the year to $325k in this account. Restructuring occurring at the contract job, so will hopefully be restructured into oblivion and won’t have to formally quit (since I’m contract and therefore more expendable than core employees). Sort of a shame since I’m starting to like the job. It just interferes too much with other stuff I want to do – 12 hours a day w/commute is a BIG commitment. I’m putting $38.5k into 3 companies: Canelson, Trican, and Iroc. Have also had Akita on the watchlist for a year or so, but maybe not as much upside there. Am done with buying / adding to the account for the year since I think the deep value season is going, time to just sit back and wait for the sell prices. Deja vu 2008-9. There’s no gains if you don’t sell at some point – just please be next year since I have nothing really down to offset except Encana and I still like it.
What I’m reading: Value Investing – Where’s the Beef?
June synopsis – surprised with that little boost there the last few days. But since I’m not selling in the taxable account this year if I can help it (taxes), I’d prefer that the market stay down. But when it’s down, companies cut their dividends too and that’s not good. In hindsight, there was a couple of times in June when I was down far below the target for the month when I should have put more cash in. I wanted to but didn’t trust my gut. Lesson learned. Most excess cash will be going into the RRSP until the end of the year anyway. I’ve put in $5k so far and have about $35k of contribution room left to use up (I cyclically contribute only in high earning years). Flipped everything over from index funds to O&G stocks on June 21st in the RRSP and made 5%+ on that this month. Once they hit target prices, I’ll sell those stocks and move into other sectors. Don’t want to count those chickens before they hatch though – could just as easily go right back down and stay down which is fine since I have a lot of contributions to make and I’d like to buy low. Received a total of $391.83 in dividends in June. Fortunately July and August will be better.
06/29 – Bought a bit of Pengrowth with a bit of cash laying around in the account. About $2700 worth & $350/yr in dividends (seems like a super high yield, but that’s what it works out to) – now at $16,446/year in dividends.
06/28 – Major ex-dividend date of June 27 is past. It’s the big dividend payment season – hooray! I’m sitting at $4022/qtr in dividends right now (6% yield overall) – $16,088/yr. The goal is to generate ~ $24-30k/year in dividend income in this taxable account within the next 2-3 years and be more of a passive & diversified investor. Works out to an estimated balance of $450k-$550k depending on how cheap I can pick up the dividend payers.
06/25 – Why so much energy? (besides the fact that I work in the industry…) I just like sales I guess. Transferred my LIRA (previously in an index fund) into an energy stock with an 8% dividend with ex-dividend date a couple of days from now. I think I even hit the (new) 52 week low price on it. Sitting on ~$15k invest-able free cash and might throw it in to hit the dividend and dump it in the summer. (I didn’t do this unfortunately and to add insult to injury that particular stock jumped 6.7% in one day – boosted due to the Progress Energy deal.) Sigh… Oh well, it would probably have gone down after the dividend holding period and I wouldn’t have been a shareholder of record if I’d pumped and dumped.
I also have Canadian and US bank stocks but the Canadian banks are still sort of high to buy and the US banks still blow (IMHO – although I did buy BofA low, I’ll dump that when it hits $15-$20 or so).
06/24 – Michael Burry called the bloodbath (apparently first) in the market in 2008-9 – here’s his talk to the UCLA Economics grads: http://www.youtube.com/watch?v=1CLhqjOzoyE – I hate that he’s not seeing a lot of positive things in the economy coming up but I have to agree. I think this next year might be okay though. Prior to founding (and closing) Scion Capital, Burry used to post on the Silicon Investors board – primarily on value investing a la Buffett:
Here’s a fun website to do a quick analysis on stocks you’re thinking about picking up: wikiwealth.com Read it with a huge shaker of salt if you know anything about particular industries or companies though.
06/22 – bloodbath yesterday in energy so breaking even for June again. Picked up some Baytex (6.5% monthly dividend @ my buy price of $40) in the RRSP and this account and some more PWT for an 8% yield and moved the TFSA to bonds (RRSP + TFSA not included in totals here.) A friend who’s strictly buy and hold (forever… never trades anything) is just sick at the drop. Not sure why people don’t keep cash handy to buy things on sale. And the divvies don’t go away (unless they’re cut of course) so what does it matter if the market drops? Got paid but nothing to pay but the mortgage next week so moved $5k of it to savings. What I’m reading: Institutionalizing Courage and Howard Marks on Assessing Performance Records
06/19 – still over July’s target. Not enough to sell anything though. What I’m reading: Sector rotation across the business cycle
06/16 – Just a couple of good market days and *blip* I’m ahead of July’s target now on gains – apparently I timed the bottom pretty well. 2.6% up for the month, which is nice. But could go down just as easily so no rah rah. My decision a week ago to not leverage Pennwest wasn’t smart. If I had, I could have sold yesterday and made a quick $4-5000 & ~ 10% (but it’s still about 50% undervalued – IMO – so I probably wouldn’t have wanted to sell). On a happy note, my UNG (very teeny amount) went up 14.97% in ONE day – yikes! What a crazy contango stock that one is.
06/12 – Up, down, all around – balance sitting at just
under quite a bit over June’s estimate so just going to wait and see if it pops over under on its own. If it’s still down when I get paid in a couple of weeks, I’ll put more in then to hit the June target. So far I’m very happy with my buys and the prices / yields and that’s what matters. Cripes, if they went up close to their past year’s max (which isn’t even that high), I wouldn’t have to put in another dime this year. No need to be greedy and too busy at work to muck around with this stuff anyway. I just want to be reasonably within range anyway and not fall too far behind the savings target. The problem with using this “target method” with a higher balance is that it causes big $5-10k daily swings when the market is swinging like it is now. Yes, it’s good that you can capture good stocks at good sale prices but you stand the chance of way over-shooting too and leaving yourself temporarily cash-poor – and that’s not necessary. So I think it’s wise to put a threshold on the max (and minimum?) to invest in a month. Maybe. That’s what I did in ’08-’09 and did well with investing in Nov, Dec, Jan and Feb – and went all in in March. Having said that, it could have all gone back up in February too. Meh, sometimes it’s plain dumb luck. Although it has paid off for the last 3 1/2 years bouncy years to use this method – especially on sell decisions – which are harder to make… but what about a long term bull or bear market??? I don’t know.
06/10 – Reason prevails over the weekend – no leverage for me (hate debt). Bought 65 shares of Alaris Royalty Corp for about $1400. Been watching this one for a long time and it’s not getting any cheaper. 5%+ dividend (monthly at that) which is nice.
06/08 – call me crazy (yup), but I’m thinking about investing in PennWest with partial leverage this month. On the bright side, the dividend yield is 7% + with an ex-dividend date of June 27 and my LOC rate is 5%. I really really want that stock at this price. It’s just about as dippy as I expect it to get. Need to chill and think about this / run some numbers over the weekend.
06/07 – Balance $257,299 – June target met (for now anyway). Pay came in at $6,394.51 – paid CC’s $862 & moved $5k to high interest savings. Paid sewer & water (ugh – almost $200/2 mos) – but have overpaid gas and electric to the tune of $700 or so. Due to the 3 mortgage payments this month, am not paying utilities this month or August (when insurance is due). Back to boring old buy and hold (with no buying) since I think I just broke even today (judging by the red and green status on the stocks). Lost my temper at work today in a meeting (held it in… sort of… may have dropped the f-bomb once or twice – one of my staff mentioned that I don’t seem to have an “inside/outside voice” filter) – so I fantasize about walking out (now). Hate it when that happens. I’m losing my tolerance for megacorp bullshit. But want to keep the eyes on the prize. And tomorrow’s Friday…
What I’m reading: Value investing on bogleheads forum
06/06 – All green again. Same range of gain as yesterday. Balance at $252,364 today – close to the goal of $254,907 for June 30, so no buying. I’m going to see if momentum takes me there or not. A colleague bought COS yesterday based on my reminder of the price + div yield. He’s an enterprising guy – has a rental in Phoenix that he bought low and is sending me tips and emails on buying foreclosure property. I’m still thinking about it… Had a meeting where we all logged into our Yahoo / Google Finance apps on our phones and had a little moment of “yay, we’re going to be rich!” at the upswing in the market. Needless to say, it was a jolly meeting. (Accountants are strange – and I admit it, I started it.) Tomorrow? Probably down, but that’s ok because – woot! – I get paid tomorrow! (Or at least I think I do, I don’t pay attention very closely.) Total invested is $48k so far – that’s about $15k more than I’d hoped / planned to have to save/invest by this point. That’s ok too, it will pay off eventually since I bought at pretty good prices. Can you tell I like “shopping”?
06/05 – Everything’s green today so no buying today. Big upswings in some of the stocks (well, big being between 0.4-6.86% so nothing crazy). Average of maybe 2.5-3% (vs. S&P/TSX comp of 1.4%) up in total or about $5k. Balance at $248,169 at opening today. Might be hitting the goal for the month with no further money put in. Feeling sort of sad about that. I was looking forward to beans and rice for the month (especially since I made a great batch of refried black and pinto beans in the slow cooker this weekend) – no fun to hit a goal without a little sacrifice and drama.
Today’s reading: Peak Idiocy – I remember going to an oil conference in maybe ’92 or so where they were talking about the certainty of oil running out by 2005 (they had bar graphs and pie charts!) and all the changes we’d have to make when auditing risk levels of our oil company clients. Whatever. That wasn’t too long after I took a hyper-inflation course (that was supposed to happen too.) STFU Chicken Little.
06/04 – Target for June 30: $254,907. Another $10k deposited in on June 4, the market for O&G stocks is still dropping (another $5k lost first week of June) and I’m running out of deployable cash. Might be another 10% potential drop left in this before they find bottom. If there is, I’ll be tapping the LOC like I did in 2009.
On the bright side, the dividend yields are looking fantastic and the employment market is pretty hot here in Oil Town. There’s no pessimism or recession here, the markets are just being stupid.
I need to re-do my table… 3 mortgage payments in June but so help me I want to hit that $255k.
- Cenovus (top-up) – invested my BMO dividends into this one on a 4%+ down day – 25 @ $31.03
- Canadian Oil Sands – 525 @ $18.9 – great price! – dividend yield at 7%+
- Next buy will be more Penn West – chasing that dividend too
What I’m re-reading: http://www.forbes.com/sites/kenfisher/2011/11/02/read-the-tea-leaves-correctly/
Suncor (top-up) – 100 @ $28.399
Penn West Petroleum (new) – 400 @ $14.249 – dividend yield at 8%+ – yikes!
Nexen (new) – 250 @ $16.23
May sales: None